How You Can Benefit from Market Competition When Buying AND Selling Your Life Insurance Policy

Most of us know from experience that competition in the marketplace tends to be the key factor for consumers to get the best value on a purchase, whether it’s a new dishwasher or a new car. The same principle holds true when it comes to purchasing insurance products.

For example, try to remember the steps you took when you set out to buy a life insurance policy — whether it was to provide financial protection for your family or to serve some other estate planning purpose. You likely compared quotes from multiple life insurance companies to see how much their premiums would be and what the death benefits would be upon your passing. Based on those competitive offers, you chose the best option for your family.

Many seniors are becoming aware of the fact that you can also sell that same life insurance policy if you reach a point in life where it is no longer needed, the premiums have become unaffordable or the policy is simply no longer meeting your family’s overall financial needs. The way that you do this is by entering into a regulated transaction called a life settlement, an alternative to lapsing or surrendering a life insurance policy in which qualified policy owners receive a cash advance on their policy by selling it to a state-licensed institution called a life settlement provider.

If you find yourself in this situation, it is crucial to recall the lesson you learned about the importance of marketplace competition when it comes time to sell that policy — just as you did when it was time to purchase it.

Two Options for Selling Your Life Insurance Policy

Once you decide to sell your life insurance policy on the secondary market in a life settlement transaction, you will soon discover there are two primary options for getting this done:

(1) Sell the policy directly to a life settlement provider; or

(2) Work with a licensed life settlement broker who will shop the policy to all qualified life settlement providers and secure the highest cash offer for you.

The basic principle of market competition comes into play when making this decision. Just like what you learned when shopping for something to purchase, you will get the best deal by soliciting multiple offers and choosing the one that is best for your family.

Of course, the companies who purchase life insurance policies from consumers would love it if you would just reach out to them directly and let them make you a fast cash offer. In fact, you may be one of the seniors who has seen television commercials about selling your life insurance policy and been curious enough to reach out to the phone number or website you saw on the screen. They have smart salespeople who will seek to persuade you that selling your policy to them over the phone is the easiest way for you to get cash in your hands as soon as possible.

Here is the problem: the fastest offer is rarely the best option for your family. Resisting an impulse decision to accept the first offer — and instead testing the open market — could mean hundreds of thousands of additional dollars in what you might obtain for your life insurance policy.

The Better Option

If you want the best value for the sale of your life insurance policy, the solution is to work with a licensed and experienced life settlement broker.

Experienced life settlement brokers help you navigate the secondary market for life insurance policies and connect you to the most qualified buyers who may be interested in purchasing your policy. When you work with a licensed life settlement broker, you start out with the confidence in knowing that your broker represents you alone and has a fiduciary responsibility to serve your best interests.

There are a number of reasons why working with a life settlement broker is a better option than selling your policy directly to a life settlement provider, such as the following:

• Market Access

Life settlement brokers have established relationships with multiple licensed life settlement providers. This allows them to shop your policy around to a wide audience, increasing competition and potentially driving up a higher offer for your policy.

• Negotiation Expertise

Experienced life settlement brokers understand the life settlement market and the factors that influence offers. They can negotiate on your behalf to get the best possible price from qualified potential buyers.

• Managing the Complexity

The life settlement process can be simple for you, but the details of the transactions themselves can be highly complex. Brokers help you navigate the paperwork, understand the different options on the table, and ensure that both you and the buyer comply with all regulations.

• Provide Unbiased Counsel

A good, experienced broker will take the time to understand your financial situation and goals with the possible sale of your policy, then advise whether a life settlement is the right option for you. The broker can also help you determine the likely potential market value of the policy so you can discuss with your family.

Each life settlement brokerage firm has their own workflows and methodologies, so it’s important to work with a firm that has a long track record in the industry and can point to case studies where they successfully marketed and sold policies similar to yours.

Conclusion

There is nothing complicated about how to maximize the sale price of any asset you decide to sell. Quite simply, a buyer has no incentive to offer their highest price to you when they know you aren’t marketing your property to anyone else. This same principle applies to the sale of your life insurance policy.

By taking a life insurance policy to the open market of licensed life settlement providers, the competitive marketplace will determine the true market value for that policy. The best way to access this market is by working with a licensed, experienced life settlement broker.

For more information on Welcome Funds, life settlements, and to receive a free, no-obligation life insurance policy appraisal, please call 1-877-227-4484 or visit www.welcomefunds.com.