Top Ten Myths? - #7 “Any senior with insurance will qualify”

The most successful producers in this industry do not take a “spray and pray” approach with this new financial option, hoping something works out. They methodically qualify potential candidates to ensure expectations are managed and most importantly that no one’s time is wasted.

You likely hired a professional agent when purchasing the policy. You should expect that same professional service when it is time to exit the policy.

Among other considerations when qualifying a potential case are the life expectancy of the insured, premium amounts, surrender amounts and loan amounts.

The life expectancy (LE) is determined through the underwriting of existing medical records. The market is embracing policies with LE’s of between two and fifteen years.

Premiums need to be level and ideally between 2% and 4% of the face.

The cash surrender value is obviously a number that has to be surpassed by any offer or it will not make financial sense for the client to pursue the settlement. Ideally the cash surrender amount should not exceed 30% of the face value of the policy.

Finally there should be low to no loans against the policy because these loans will have to be paid out of any gross offer thus lowering the potential return in the "Life Settlement" transaction.