Life Settlements: Market To Senior Advisors

The secondary market for life insurance continues to expand. More institutional capital is entering the marketplace and more providers with access to capital are becoming established to buy life insurance policies from qualified sellers (age 70+). The growth of capital to buy life insurance is a response to the strong demand from seniors with unneeded, unwanted, or unaffordable policies. They are looking for a market alternative to lapse or surrender. What is driving this strong demand?

To be sure, favorable demographics are helping growth. The number of seniors reaching life settlement qualifying age is accelerating and will continue to accelerate as Baby Boomers reach senior status. While the sheer numbers of qualifying seniors is a driver, the fuel to sustained growth is in the efforts by advisors to make the senior community aware of the life settlement option. Seniors, more than any other demographic group, rely on the recommendations of trusted advisors for financial advice. If the advisor does not raise the issue of a life settlement, a potentially qualifying policy could be lapsed or surrendered. The conclusion here is that an advisor must be comfortable with life settlements to recommend them.

The life settlement industry is recognizing its responsibility to create awareness and train agents on life settlements. More and more continuing education programs are available in person and online. Life settlement brokers and providers offer presentations, seminars, and one-on one training on the secondary market and the life settlement process. This education gives advisors a starting point for life settlement opportunities within their own book of business. What happens when this supply of qualifying policies is exhausted? The answer is not to prospect other seniors, but to market life settlements to other senior advisors.

Financial advisors and insurance agents have long sought out other professional spheres of influence to generate referrals, primarily CPAs and attorneys. One effective networking approach is to ask the senior client for the names of their CPA and attorney. Making warm calls to these professionals is a painless way to begin building a solid relationship. Life settlements offer an additional opportunity to strengthen these relationships. If seniors rely heavily on the recommendations of advisors, the entrepreneurial agent then might ask, “Who else is advising my senior client?”

This networking approach to marketing life settlements is analogous to the difference between fishing with a line and fishing with a net. These other advisors have the trust of their senior clients. Perhaps there is a relationship with a reverse mortgage specialist, a bank trust officer, an elder care attorney, an investment advisor, a Medicare or Medicaid specialist, a longterm care insurance agent, and various healthcare service providers and consultants. There may be several sub-specialists within this group. Get to know them and talk to them about life settlements. They will not be getting this information from other sources. Train them to look for life settlement opportunities within their client base. If your senior client is selling a business, introduce yourself to their business broker or valuation specialist. In Southern California, we have networks of senior advisors who meet once a month for breakfast or lunch. Everyone in attendance has a specialty senior service. These are tremendous opportunities to meet professionals who serve the senior market daily. If you have one of these senior networking groups in your area, attending one or more of these meetings on a regular basis is a must. If you don’t have such a network in your area, consider creating one on your own. In addition, you might try contacting one or more trade associations of professionals serving seniors in your state. The association websites frequently list contact information for each member.

How to Market to Senior Advisors

Building relationships is the key to developing any referral network. I believe the best way to build these relationships is the one-two-three approach:

• Step 1 – Identify the senior advisors you want to prospect.

• Step 2 – Mail or e-mail your favorite life settlement article or articles to your prospect.

• Step 3 – Follow-up the mailer with a phone call. If the prospect did not receive or read your mailer, get their permission to resend the articles. If you decide to send a second email, alert your prospect to the subject and your e-mail address. This will help your email avoid a SPAM filter. The purpose of the followup phone call is to set a face-to-face appointment.

To brand yourself as a life expert, invest the time to perfect a brief 10 to 15 minute presentation that will establish your expertise. If you have not had the time to perfect your presentation, ask your life settlement wholesaler to fill in. You should be able to pick up several ideas to incorporate into your own presentation. When you are finished, offer to tell your senior clients about your prospect’s services.

Life settlements and the secondary market will continue to grow as seniors learn that there is a market to buy their policies ticketed for lapse or surrender. The key to this growth is how quickly advisors disseminate information on life settlements to the universe of qualifying seniors. Recruiting, training, and compensating other senior advisors to be life settlement advocates will not only accelerate industry growth, but it will also provide economic benefit to all parties involved.