There are two options when choosing how to engage in a life settlement.
The first option is to engage a Life Settlement broker who represents the policyholder and whose motivation is the same as the policyholder to get the highest price possible for the policy.
The second option is to deal with a life settlement provider who is actually the buyer of the policy or working on behalf of an institutional investor as the buyer. Basically, a life settlement provider has every incentive to pay the lowest possible price for a policy.
Life insurance providers typically large corporations that place their advertising on national television. There are three topics that the providers typically misrepresent.
“Broker’s fees lower the value received by policyholders.”
Life settlement providers often claim that any increase in price for a policy by a broker is more than offset by the broker’s fees. Not true. Broker’s facilitate getting the highest amount in fair market value from buyers who bid on the policies and almost always result in more money being paid to the policyholder, even after deduction of the broker’s fees. Remember, the broker has the same motivation and goal as the seller, to get the highest price. Life settlement principals are the buyers and like any buyer want to get the best deal possible resulting in lower amounts paid for policies.
“The policyholder will get their money faster dealing with a provider.”
Providers like to promote a quick payment as an advantage to using their services. However, quicker is not always better. While providers may claim they can close and pay on a transaction in half the time that brokers take, we are usually talking about a matter of a few weeks and in some cases the same amount of time. If a policyholder doubles the amount of a purchase price over that being offered by a provider and it takes 6 weeks versus 4 weeks, is that a better deal for the policyholder? Not if maximizing the price is the goal.
“The life settlement provider just wants to help the policyholder”
While a provider’s motive may be to help, that motivation is still tied to paying less, not more, for the policy. So is trying to purchase the policy at the lowest possible price really “helping” the policyholder? No.
So, the bottom line is that a life settlement broker represents the policyholder and is financially incentivized to generate higher purchase prices for policies. In spite of the provider’s advertising messages, the real bottom line is who represents the policyholder more effectively. We believe the answer is clear.
Professional Life Settlements Plus is a reputable life settlement brokerage firm that provides efficient, effective and excellent service to its clients. Call us today!
Dan A. Penning
Life Settlements Specialist
Professional Life Settlements Plus
