Our Hands-On Approach to Brokering Policies Ensures the Maximum Payout for the Seller and the Highest Commission for the Agent
The role of competition in determining market prices is a fundamental principle of our free market economy. This same economic principle applies to the secondary market for life insurance ─ a market exchange forum for policy owners seeking to sell their unwanted insurance policies to institutional buyers.
Although a policy owner has the option to directly execute the sales transaction with any buyer that operates in the marketplace, they should be aware that accepting an offer from a single buyer circumvents the competitive bidding process which is essential to optimizing the payout received by the seller.
Life Settlement Brokers Drive Higher Payouts
In any life settlement transaction, policy sellers and buyers have totally opposite objectives.
While a policy owner seeks to obtain the maximum value for an unwanted policy, market buyers are looking to purchase policies at the lowest possible price point.
That’s where the broker plays an essential role. The broker initiates a competitive bidding process and negotiates on behalf of the policy seller to drive up the purchase price and obtain the highest possible payout for the policy.
Success Story: The Impact of a Hands-On Brokering Approach
The success story summarized below demonstrates that when market buyers are forced to compete when acquiring policies, the seller benefits as well as the agent who earns commission on the sale.
Case Profile Stats:
- 87-year-old female; 9+ years L.E.
- $4 Million Standard UL Policy
- $148,000 Annual Premium
- CSV $0
- 15 Offers from interested buyers
- $800,000 Lowest Offer
- $1,170,000 Highest Offer (Accepted by Seller)
- $75,000 Comp paid to Agent
Narrative Summary:
The 87-year-old policy owner was feeling the burden of annual premiums for a $4 million policy she no longer needed.
After consulting her insurance advisor to determine the best option to maximum the monetary value of the policy, she accepted her agent’s advice to sell the policy in the secondary market. Her agent facilitated the application on her behalf and requested that Asset Life Settlements broker the transaction for the highest possible pay-out.
Following the underwriting process, we took the case to market by submitting it to multiple funding sources and began the competitive bidding process. The case generated strong interest from buyers and our negotiations to drive up the price were rigorous.
At the conclusion of the auction process, we were successful in generating a total of 15 bids that ranged from $800,000 on the low side, to a high offer of $1,170,000 which the seller accepted.
The seller was thrilled with the outcome and used the proceeds from selling the policy to supplement her retirement income. Her insurance advisor earned $75,000 in commission for facilitating the transaction on behalf of his client.
Key Take Aways
Working with an experienced and reputable broker is essential to generating the most successful outcomes when selling unwanted policies in the secondary market.
Asset Life Settlements is one of the most skilled and successful brokerage firms in the marketplace because it uses a “hands-on” approach when negotiating with multiple buyers. We do not use an automated bidding platform with arbitrary closing dates.
When agents and advisors partner with Asset Life Settlements to sell their clients’ policies, they can confidently walk away from the transaction knowing they left no money on the table.
Call us at 1-855-768-9085 to explore your client’s eligibility for a life settlement or to request a free policy appraisal.