Life Settlement Frequently Asked Questions
Q: Are Life Settlements regulated?
A: Life settlements are currently regulated in most states. Typically, licensing and oversight is handled by a state’s department of insurance. For more information on how your state regulates life settlements, refer to your state department of insurance website. We will also be happy to provide you with more information if you need it.
Q: What types of policies are eligible for Life Settlements?
A: Term Life policies that are convertible, Universal Life, Whole Life Universal Life, Whole Life, Variable Universal Life, issued by U.S. based insurance companies. Joint, second-to-die policies, group policies and those issued by FEGLI, VGLI and SGLI are typically eligible for a life settlement as well.
Q: Are there any up-front fees or obligation to sell my policy?
A: There are no application fees or up-front costs. If at any point you are not satisfied with the offers we present, you are free to walk away with no obligation or cost to you. If you accept an offer, our fee will be paid directly by the purchaser through the escrow agent.
Q: Is a medical exam required?
A: No. Unlike when you purchased your life insurance coverage, a medical exam is not required for you to qualify for a life settlement. Medical underwriting decisions are based on an independent review of the medical records that we obtain from your health care providers.
Q: How much is my policy worth?
A: Since individual policy amounts, premiums and life expectancies vary, it is difficult to set a standard amount. After a brief consultation, we can generally provide you with an estimated range of your policy’s value as a life settlement.
Q: How long does the process take?
A: It depends on the availability and sensitivity to timing for the policy owner. A broker can negotiate a quick offer; however, this would not allow the policy owner to benefit from true price discovery and buyer competition. Ideally, a policy owner would minimize future premiums and approach the market 90 days prior to needing the settlement proceeds.
Q: Why should I work with a life settlement broker?
A: It is always best to have an experienced advocate representing the policy owner to minimize mistakes, save time, and facilitating the auction process. On average policy owners receive 6-8 times more than the original offer on the policy.