Life Settlements

Small-Face Life Settlements Will Help Brokers and Agents Find Incredible Results in 2008
by Michael D. Quinn

T he life settlement industry has been geared toward high-net-worth individuals with large-face-value policies. However, small-face policies comprise the vast majority of life insurance policies in the United States. Since they will now be available for purchase individually, there are millions of opportunities for brokers and agents to expand their business and add a new revenue stream.
There will never be a better time than 2008 for brokers to begin exploring life settlements for their clients when you consider that 80% of all in-force policies throughout the United States are small-face policies (those valued between $25,000 and $250,000) and a crucial milestone has just been passed by creating access to this market.

Access to small-face policies will be a primary catalyst for impressive growth the life settlement industry in 2008. Increased public awareness, higher interest from agents and brokers, and additional industry participants will play key roles in the market’s growth, but the biggest catalyst will be the widespread availability of life settlements for small-face policies. Small-face-value polices (those from $25,000 to $250,000) represent the vast majority of all in-force policies in the United States. Compared to other emerging opportunities in the insurance market and factoring in risk, this represents one of the strongest – if not the strongest – revenue opportunities in the current market today and for the foreseeable future. With the addition of low processing costs, each member of the distribution channel – from providers to brokers and agents – can benefit from the sale of these policies.
The widespread availability of life settlements for small-face policies has been made available by a proprietary underwriting and processing solution called “CSF.” Brokers and agents now have a way to process small-face-value policies profitably. This patent-pending process reduces the time it takes to secure a conditional offer for a policy from 45-90 days to 10 or fewer business days.

Brokers and agents now have a way to process small-face policies profitably. This patent-pending process reduces the time it takes to secure a conditional offer for a policy from 45 days to 90 days to 10 or fewer business days. After rolling CSF out in late 2007, 2008 will mark the first full year consumers have to take advantage of the process and the increase in business for brokers and agents will be dramatic throughout the year.

The new process makes it incredibly easy for agents, brokers, and other intermediaries to facilitate the sale of small-face policies, giving them access to a significant revenue source that does not threaten their current business. Licensed life settlement provider partners work with advisors to facilitate the sale of policies and they represent the policyholder’s the interests.

In addition, small-face life settlements may offer an easy opportunity since many life insurance policyholders now have a valuable alternative to making ongoing premium payments, surrendering their policy for a relatively small cash payout, or lapsing their policy. The completed settlements will come quickly and often as soon as insurance professionals spread the word about small-face life settlements and clients understand they have a new and better option.
The approval process consists of the following easy steps:

1. An agent, broker, provider, or other intermediary submits a policy to a licensed life settlement provider working with CSF. The following documents are required: Life insurance settlement request form, including a HIPAA authorization form In-force policy illustration from the insurance company
2. The application is reviewed and underwritten. During this time, the insured may be contacted by the underwriter for more information about their medical status. A decision will be made and a conditional offer extended by the licensed life settlement provider partner in five to 10 business days.
3. Once the policy owner accepts the conditional offer, the submitting agent, broker, or intermediary gets a closing pack with all the necessary documentation required to change ownership and change the beneficiary. If necessary, the insured’s medical records may be gathered as part of this process, at no expense to the seller.
4. Once ownership and beneficiary status has been changed, commissions are paid after the 15-day recession period has expired.
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Michael D. Quinn is executive vice president of Cielo Capital Management, LLC, which specializes in making life settlements available to holders of small-face life insurance policies. He has more than 40 years of senior-level experience in finance and insurance and is the founder and former chairman of Estate Trust, Inc., and a past CEO of the Wye Group, Inc. For more information, please see www.cielolifesettlement.com.