Most life settlement opportunities come from a producer's own book of business somewhat organically.
If a producer stays informed about their clients' situations, they will recognize events that are likely to yield life settlement prospects, such as:
- Retirement.
- Divorce.
- Sale of a business.
- Death of an intended beneficiary.
- Policies with premium increases that have become unaffordable.
- A term policy coming to the end of its conversion period.
Additionally, if a producer has educated clients and centers of influence about life settlements, the clients may actually initiate the life settlement conversation before surrendering a policy or letting it lapse.
Making Unsolicited Offers
Can a producer actively seek and cold call for life settlement prospects?
We always approach this topic with a great deal of trepidation.
Older insureds who have had some decline in health since their policies were issued are the prime prospects for life settlements. However, for an insured in poor health, a life insurance policy is a uniquely valuable, irreplaceable asset.
Yet, during life, and especially around retirement age, financial situations change.
So, when due care is exercised, some of these people can be legitimately helped by a life settlement.
Needs Analysis
The first thing to keep in mind is that a life settlement is an alternative to surrendering or lapsing a policy; it is not an alternative to keeping a policy.
