Performing an online search of “How to Sell My Life Insurance Policy”, or “How much is my Life Insurance Policy Worth”, or “Life Settlement Company”, and you will find a litany of life settlement ads that can be overwhelming to navigate.
Who can I trust to help me sell my life insurance policy?
The ads on Google for life settlements are from two groups: direct life settlement companies and life settlement brokers. Each ad will boast how they can help you sell your life insurance policy, or how they will give you the most amount of cash for your life insurance policy. But who do you choose, and why?
How do you choose between selling your policy directly to a life settlement company or using the services of a licensed life settlement broker? Does selling a life insurance policy directly to a life settlement company get me more cash than using a life settlement broker? Is the commission really worth it to use a life settlement broker’s services?
Life Policy Solutions is a licensed life settlement broker in California who works with clients all over the United States. Does that make us biased in this article? Yes, of course. This article favors using a life settlement broker’s services over selling to a direct life settlement buyer, but we believe there are very valid reasons for working with a life settlement broker.
Every policy owner has access to direct life settlement buyers such as Coventry Direct, Magna Life, and Abacus, just to name a few. A life settlement broker, on the other hand, has access to a dozen more life settlement companies that only buy direct from brokers. Some of the largest buyers of life insurance policies right now only buy from brokers and do not buy direct from consumers. Additionally, a life settlement broker, such as Life Policy Solutions may have years of experience selling life insurance policies and have built relationships with buyers. These long forged relationships allow life settlement brokers to navigating the complexities of selling a policy, and negotiate maximum value for a policy sale. Often times, in our experience we see final sale values extend far past opening offers. It is because of a broker’s ability to create value and entice bid wars between multiple buyers at the same time for a single policy. This gained value is not obtainable by a consumer selling direct to a life settlement company.
A good example of the difference in policy sale value between what a consumer can obtain by selling directly versus what a broker can obtain is to look at a $500,000 life insurance policy on a healthy 80 year old male. A direct buyer offer may offer the policy owner $50,000 to sell a policy, whereas a life settlement broker may generate a value of $80,000, $100,000, or even more by creating demand with multiple interested buyers. The more interested buyers that view the policy the better the chances to sell for a maximum value. It is very important to understand a life settlement company wants to buy as low as possible in order to generate the highest return on their investment, and they hope buying direct from a consumer allows them to reach this goal. A direct life settlement company would prefer consumers don’t call a life settlement broker because it means they may have to pay up for that same policy, and even risk not being able to purchase it due to other interested buyers willing to pay more. A life settlement broker’s job is sell high. A life settlement broker will build sale value where a consumer may not have the same ability. As policy owner you have to ask yourself is it worth it to have a broker represent your life insurance policy sale in the life settlement market?
A life settlement broker gets paid a commission which will vary by individual or company. The life settlement commission is based on the final sale value of the policy, or as an agreed to flat fee. A good way to understand the reasons for paying a commission is to compare a life settlement broker’s services to a real estate agent. A broker’s role in selling a life insurance policy is very similar to selling a house, after all a life insurance policy is a piece of property that you the policy owner owns. Would you sell your house without a real estate professional? Chances are no, for much the same reasons why it would benefit you to utilize the expert services of a life settlement broker.
A qualified, licensed realtor, and likewise a licensed life settlement broker, knows the market and knows how to get your property in front of qualified buyers. The more qualified buyers who see your property the better the chances of a higher sale price. If you are really lucky the property will be so exciting and hot that it starts up a bidding war and offers keep increasing. This comparison of selling a house to selling a life insurance policy is the best way to explain the benefits of what a life settlement broker brings to the table and why their commission is money well spent.
Additionally, when a policy sells and it comes to sale closing, there is legal paperwork to navigate. A broker will help the seller understand all questions that may arise and they will be there to offer expert guidance. Again it is the broker’s job to oversee the entire life settlement process from start to finish. It is the life settlement broker’s job to protect your best interest and get you the most cash to sell your policy.
If you go back to our sales example above, just ask was it worth using a life settlement broker instead of going direct? If you went direct to a life settlement company and your offer was $50,000, and a broker was able to get you $80,000 for the same policy, that’s a $30,000 increase! If the commission was 15% of the sale price that still leaves you with $18,000 more cash in your pocket than if you went direct. What if the offer hit $100,000, or $150,000, imagine the extra cash in your pocket. Now add in the broker’s guidance through the entire life settlement process, being there to answer any questions, and the piece of mind knowing the broker is working to protect your best interest. I may be biased, but I would say hiring a life settlement broker is worth it, wouldn’t you?
Of course, you, as the policy owner, has every right to sell your own life insurance policy. It’s your property after all. You have the choice to sell the policy directly to any life settlement company that works with consumers. Life Policy Solutions actually wrote an excellent guide called “The 10 Best Life Settlement Companies.” Click here to read. We want you to be as informed as possible when looking to sell your life insurance policy. Life Policy Solutions has long established relationships with every one of these reputable and trusted companies, and we work daily with each of them.
While you have every right to sell your own life insurance policy, we must advise any individual to at the very least consult with a life settlement broker before making any decisions. A life settlement broker may be the difference in thousands of additional dollars in your pocket, saved time, and expert guidance. Don’t forget a life settlement broker works for you, and only you. Your best interest is their best interest.
If you would like to learn more about how to work with a life settlement broker, Life Policy Solutions can provide expert guidance when looking to sell a term life insurance policy, sell a universal life insurance policy, sell a whole life policy, or even sell a variable or key man life insurance policy. We have helped secure industry leading cash payouts for our clients since 1999.
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