Client Sold $500,000 Policy for 48% of Face Value Agent Earned $24,200 in Comp

For seniors who may be planning to sell an unwanted policy, this life settlement success story illustrates the importance of working with an experienced and tenacious life settlement broker. In short, work with broker who has a reputation for being relentless in negotiating the highest possible, regardless of the obstacles such as those detailed in the case summary below.

For agents and financial advisors assisting their clients with life settlement transactions, this case demonstrates the potential to earn a sizable commission for selling policies with lower face value.

Case Profile:

•   77-year-old female; 7-9 year L.E.
•   $500K Standard UL Policy
•   $9,664 Annual Premium
•   CSV $0
•   29 Offers from interested buyers
•   $40K Lowest Offer
•   $240K Highest Offer (Accepted by Seller)
•   $24,200 Comp paid to Agent
•   Client used proceeds from the sale to fund paid-up premiums on a $1M policy

This case highlights a proactive approach to estate planning by a 77-year-old woman. Recognizing a shift in her estate planning goals, she consulted with her advisory team, including an insurance advisor and a personal banking representative. They conducted a thorough needs analysis, which revealed that her existing $500,000 life insurance policy was no longer necessary. The advisor suggested selling this policy and using the funds to support the premiums for her $1 million policy, a strategy the client found agreeable.

Asset Life Settlements was then engaged to manage the application and underwriting processes, as well as to secure the best offer in the secondary market. During our internal underwriting, Asset Life Settlements discovered that the client had heart impairment. The team, drawing on their experience, knew that proper documentation of this condition could potentially increase the value of the offer. Asset Life Settlements initially received a response from the insured’s cardiologist, who indicated that the insured had not visited their office and they therefore had no additional records available.

During Asset Life’s thorough review of the insured’s other APSs, we identified the same cardiologist who was noted in the additional APSs from her other doctors. The cardiologist continued rejecting Asset Life’s requests for her records stating “No records on file” even after we had engaged the insured, her family, and the advisor. Asset Life, under the direction of the insured and her advisor, continued the bidding process without the needed cardiologist’s records and obtained an offer of $120,000.

Asset Life advised the seller not to accept the offer of $120,000 until we had the complete cardiology records. After two months, the team’s persistence paid off. Asset Life Settlements prevailed in obtaining the previously thought-to-be-unavailable-and-much-needed cardiologist’s records. The new records allowed them to reopen the bidding process, significantly increasing the offer. Ultimately, the client received a payout of $240,000, a testament to the effective collaboration and perseverance of all parties involved.

Key Take-Aways:

Life settlements have emerged as a powerful wealth preservation tool for financial advisors and other professionals who have a fiduciary obligation to recommend the most prudent exit strategy for unwanted or financially burdensome policies.

Life settlement brokers, such as Asset Life Settlements, have a fiduciary obligation to relentlessly negotiate the highest possible offer.

Insurance licensed advisors who facilitate life settlements for their clients have the opportunity to earn commission. In this case, the agent received a commission check for $24,200. (Note: Commissions that are paid to the broker or to the agent are fully disclosed to the client.)

If you have questions about life settlements or a potential case you would like to discuss, feel free to call us at 1-855-768-9085, or use our free online life settlement calculator