For an advisor, identifying that a client may be a candidate for a life settlement is only the beginning. The real work starts once the policy enters the market.
At SFS Life Settlements, our role is much more than submitting paperwork and waiting for an offer. We manage a process designed to understand what the client is ultimately trying to accomplish, determine whether a life settlement is appropriate in the first place, position the policy effectively in the market, create competition among institutional buyers, and help the advisor and their client evaluate the options that come back.
Most of that work happens behind the scenes. And that’s exactly the point.
The advisor doesn’t need to become a life settlement expert. They need a specialist who understands the market, represents their client’s interests and can manage the complexity while keeping the advisor informed throughout the process.
It Starts With the Client, Not the Policy
Before we talk about underwriting, buyers or offers, we want to understand why the client is considering a change to their life insurance in the first place.
What is their ultimate objective?
Perhaps premiums have become difficult to justify. Maybe the policy is no longer needed for estate planning. The client may need liquidity, be considering surrendering the policy for its cash value, or simply have coverage that no longer serves the purpose for which it was originally purchased.
That conversation matters because a life settlement is not automatically the right answer simply because a policy may qualify.
Our first responsibility is to understand the situation and help determine whether exploring the secondary market makes sense within the client’s broader objectives. In some cases, the right decision may be to keep the policy. In others, it may be to modify the coverage, surrender it or pursue another alternative. And when a life settlement does appear appropriate, we can begin determining what the market may be willing to pay.
That client-first approach is an important part of how SFS works with advisors. We’re not looking at a policy in isolation. We’re helping the advisor evaluate another potential option for an asset their client already owns.
Then We Build the Case
Once it makes sense to explore a settlement, SFS begins gathering and reviewing the information necessary to properly present the policy to the market.
This includes the policy details, in-force illustrations, premium requirements, ownership information and medical records needed for underwriting. We review the case, identify potential issues and work to make sure buyers have the information they need to evaluate the opportunity.
There is considerably more involved here than simply completing an application.
How a case is prepared and presented can affect how buyers evaluate it. Different institutional buyers have different investment criteria, portfolio needs and approaches to underwriting. Knowing the market means understanding those differences and determining which buyers may have the greatest interest in a particular policy.
That’s one of the areas where experience matters.
Creating a Market, Not Simply Getting an Offer
Once the case is ready, SFS identifies potential institutional buyers and takes the policy to market.
This is where one of the most important parts of our role begins: creating competition.
A life insurance policy doesn’t have a single predetermined secondary-market value. One buyer may evaluate a policy very differently from another based on its investment criteria, existing portfolio and view of the underlying risk.
That’s why receiving an offer and determining the market value of a policy are two very different things.
SFS works with a broad network of institutional buyers and uses that reach to create competitive tension around qualifying policies. As offers develop, we negotiate with buyers and continue working the market with the goal of improving the outcome for the policy owner.
The advisor and client don’t have to manage those conversations. SFS does.
Keeping the Advisor at the Center of the Relationship
While much of the work happens behind the scenes, the advisor remains an important part of the process.
We communicate what we’re seeing in the market, explain the offers and help provide the context needed to evaluate them. Our job isn’t to replace the advisor’s relationship with the client. It’s to bring specialized knowledge into that relationship.
That distinction is important to us.
Advisors spend years earning the trust of their clients. When they bring SFS into a situation, they’re trusting us to support that relationship, not interfere with it. We represent the policy owner’s interests in the transaction and provide the market knowledge, negotiation and execution necessary to help the advisor guide their client through an unfamiliar process.
If an offer is accepted, SFS continues managing the transaction through closing, coordinating the parties and helping move the case toward completion.
From the advisor’s perspective, the process should feel straightforward. Behind the scenes, there may be considerable activity required to make it that way.
There Is Value for the Advisor, Too
The most obvious reason to explore a life settlement is the potential benefit to the client. But there can also be meaningful benefits for the advisor and their practice.
First, simply presenting a life settlement as an additional option can help advisors fulfill their responsibility to thoroughly evaluate alternatives when a client is considering surrendering or lapsing a policy. Rather than allowing an asset to disappear without understanding whether another market exists for it, the advisor can help the client make a more informed decision.
There may also be financial opportunities for the advisor, depending on licensing, transaction structure and applicable regulations. A life settlement can potentially generate a commission, and in situations where a portion of the proceeds is used to purchase term coverage or another appropriate insurance solution, there may be an additional opportunity associated with that transaction.
A settlement may also allow the existing policy to remain in force after the sale, which can have implications for renewal commissions depending on the policy and compensation arrangement.
Over time, life settlements can become another potential income stream for an advisor’s business. More importantly, that opportunity comes from helping clients identify value in situations where they might otherwise have simply surrendered or allowed a policy to lapse.
The Advisor Doesn’t Need to Know Everything About Life Settlements
We believe that’s one of the most important points about the entire process.
An advisor doesn’t need to know which institutional buyer is most likely to want a particular policy. They don’t need to understand every underwriting variable, negotiate competing bids or manage the transaction through closing.
They simply need to recognize when a client’s situation may warrant another look.
That’s where SFS comes in.
We start by understanding what the client is trying to accomplish. We help determine whether a life settlement is worth exploring. If it is, we build the case, take it to the appropriate buyers, create competition, negotiate the offers, communicate with the advisor and manage the transaction through closing.
The complexity stays behind the scenes so the advisor can remain focused on what they do best: helping their client make the right decision.
Have a Client With a Policy Worth Exploring?
If you have a client considering surrendering, lapsing or making a significant change to a life insurance policy, you don’t need to know whether it will qualify for a life settlement before reaching out.
That’s our job.
Bring the situation to SFS Life Settlements. We’ll help you understand the client’s objectives, evaluate whether a settlement may be appropriate and, when it is, put our market knowledge and buyer relationships to work to determine what’s possible.