Setting Client Expectations in the Life Settlement Market
by Scott Kirby

Setting client expectations is critical to the life settlement process. Sharing your experience makes all the difference since a life settlement is probably a new venture for your client.
      First, explain the alternatives and why a life settlement may be a very plausible solution. Your knowledge and insight will be valuable whether offering replacement coverage, liquidating a policy that is no longer needed, or liquidating a policy with premiums that are no longer affordable.
      When discussing what a life settlement is and how it works, remind your client that medical and actuarial information is used in a policy valuation process. Your settlement broker will introduce your client’s policy to multiple funders. The process can take as little as 30 days. However, it is more likely to take 60 to 90 days from the initial application to the funding of the life settlement to the client.
      Next, it is paramount to give your client regular updates even when there is no new information to provide. Your life settlement broker should provide regular information to you on a timely basis. After all, you are only as good to your client as the information that you get.
      The contract phase of a life settlement is different from that of a real estate or business transaction since money does not change hands at the closing table. The contract process is the formal acceptance of the client’s agreement to sell their life insurance policy. After that step, the purchasing entities’ legal department and the representing escrow agent have to review the entire transaction. The funding entity may request additional documents in order to finalize the transaction. From there, the proper carrier change forms need to be submitted and approved to show the new owner and beneficiary as the purchasing funder. At this stage, the client receives the settlement funds per the settlement agreement.
      These transactions can range from thousands of dollars to millions of dollars. Since large sums of money are being passed from one entity to another, your client needs understanding, patience, and clear expectations to maintain a comfort level throughout the life settlement transaction.
      Don’t be timid about laying out the plans for a proper life settlement transaction. Your client will be looking for your insight and professionalism. In turn, you will be looking for the same from your life settlement broker, which should be a specialist in the field.
      When choosing a life settlement broker, be sure to ask about the following:
• How long have they been in business?
• How many settlements have they done?
• Do they provide E&O insurance
• Do they provide licensing and compliance support?
      Having a life settlement broker that gives you the tools and insight for a quality life settlement transaction will make all the difference to you and your client.
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Scott Kirby is co-president for Advanced Settlements Inc. The life settlement company has a network of more than 20 institutional funding sources in the secondary life insurance market. The company works with financial and legal professionals whose affluent senior clients are seeking a sensible exit strategy and the highest possible cash value for their unwanted life insurance policies. For more information, contact Advanced Settlements at 800-561-4148, or visit www.advancedsettlements.com.