An Agent's Guide To Life Settlements Case Submission

The Life Settlements market is a terrific opportunity for policyholders and agents, with the potential for solid return on investment. But too often policyholders and agents wanting to take advantage of Life Settlements are left scratching their heads. How do you enter the market exactly? What does it take to qualify? What’s the process and where do you start? What is a Life Settlement broker going to look for?

Not surprising – in a recent poll, the number one reason listed by agents for not entering the Life Settlements market was unfamiliarity.

• Insured Information – Life Settlement providers need information on the health of the insured (no terminal or life-threatening illness), age (most companies require policy holders to be at least 65 years old), and proof of US citizenship and residency.
• Insurance type – Depending on the provider, most insurance types – traditional, universal, variable, whole life – are accepted. Also, is this an individual policy or a “second to die” policy? Some companies will consider these as well.
• Policy face value – For most Life Settlement providers, policies valued between $50,000 and $20 million are considered.
• Proper documents  - Life Settlement providers require an application for a Life Settlement deal, any required HIPAA and medical records releases, insurance releases, state of policyholder’s residency, and a copy of the policy, if available. If the policyholder supplies the medical records, they must encompass the last five years and include all medical information, including any testing, hospitalization, ongoing treatment, specialist visits, etc.
• Current Illustration – Agents should run an illustration using current assumptions, typically within the last 30 days. Also, providers require proof that any loans on the policy are paid in full through the current policy years. The providers usually want to see accumulation/cash values to the policy maturity date or to age 100. When running illustrations, agents should remove any no lapse protection or related riders.
• Life expectancy rates. – Not all Life Settlement providers require this, but agents should be prepared to provide the information. As to life expectancy rates, most providers are looking for an average life expectancy between 36 and 108 months, depending on the provider. Any life expectancy measurements should be no more than 90 days old, and different providers require use of specific life expectancy providers. Check with your life settlement provider for more information.

• Proof of state licensure
• Original or certified copy of the policy
• Copy of photo ID of the insured and owner
• A copy of trust or corporate documents
• A completed W-9 for the seller
• Completed W-9 for the agent/broker receiving any compensation
• Carrier-issued coverage verification
• Recent illustration
• Purchasing documents