Do I Need a Settlement Broker?

Life insurance may seem fairly straightforward: get life insurance when you’re healthy, keep your premiums up to date, and when you die the face value is paid to your beneficiary. But there are other scenarios, and one of them is to sell your policy in a life insurance settlement.

What Is a Life Insurance Settlement?

Life insurance settlement, or life settlement, constitutes the sale of a life insurance policy for its present market value. Seniors can access the equity accrued in their life insurance policies to pay debts or for unexpected bills, emergencies, or just to enjoy life!

Arising as an option in the last decade, life settlement evolved from the viatical life settlements option developed in the 1980s. Prior to these alternatives, the insured had just two options: borrow against the cash value of a life insurance policy, or turn to the insurance company for the policy’s surrender value.

Now seniors can access true current market value from their life insurance policies! But there are some restrictions to consider:

• You must be 65 or older.
• Be free from terminal illness.
• Have a life expectancy of 12 years or less.

The majority of retired seniors qualify, and that likely means you do too!

I Qualify - Now What?

On the surface life settlement is simple to understand. But where do you find someone to buy your policy? There are many steps and considerations in the process. That’s where life insurance settlement brokers come in.

It is possible to find a buyer for yourself, but the actual process can become a tangle of government rules and regulations, not unlike trying to sell a home yourself, including navigating all of the documentation. It isn’t something most amateurs want to tackle, and for a good reason.

What Is a Settlement Broker?

Often referred to as a viatical settlement broker, a settlement broker is a licensed insurance expert who will walk you through the process of settling the current market value of your life insurance policy - and will manage the minutiae that accompanies it, including selling the actual policy.

Though most states do not regulate the activities of settlement brokers, there are requirements which they must fulfill. They must be:

• Registered with the U.S. Department of Justice.
• Registered in one American State.
• Registered with a minimum of one life insurance company.
• Insured against errors and omissions.

For your own protection - and to maximize the benefit of a life settlement - the broker should be willing to let you compare the rates charged and services offered by various brokers. The brokers you are considering should also have a reputation for trustworthiness and integrity.

How Do I Choose a Settlement Broker?

After you’ve qualified a settlement broker, determined the maximum benefit they can provide and their personal integrity, it boils down to personalities. Do I get along with the broker? Does he or she care about people in general, and me in particular? Are they in the business just to make a fast buck, or do they care about how life settlements help people in their golden years? Do I like them? It’s not too much to ask.

In the end, using a settlement broker is the preferred way to maximize a life settlement. And it can be a wonderful way to get the most out of your retirement years.