Invest in Life Insurance Settlements
How to Invest in Life Insurance Settlements
To invest in a settlement, you will need to work with a broker, private equity fund, institutional investor, or other accredited investor. If you’re a high-net-worth individual, it’s possible to go straight to a broker and work with them to purchase a policy. If you’re not a high-net-worth individual, you will need to work with a fund or investor and pitch your money into a fund that purchase policies and divide the returns among all the investors.
Click here for the National Association of Insurance Commissioners’ list of state insurance departments. Here, you can find addresses, phone numbers, fax numbers, website URLs, and employee directories. We here at LifeQuote cannot offer settlements to investors. We can, however, help you find the life insurance you need to protect your loved ones and their financial future!
The best place to start is with your state’s insurance commissioner or office of insurance. They may even have lists of brokers who deal in settlements. Do your research on each potential firm or broker before you work with them – look them up online, read reviews, and check out their standing with the insurance commissioner and/or the Better Business Bureau.
Once you’ve found a broker to work with, these are questions you want to ask before you invest in a settlement:
Is the policy term or permanent? If your insured lives longer than the term, there is no death benefit. Before you purchase, verify the type of policy and, if it’s a term, find out if it’s possible to convert to a permanent policy before purchase.
When was the policy issued? Some policies offer limited benefits if the policyholder dies within the first two years of coverage. Be sure the policy you are buying is beyond any such period of limited benefits.
Who is responsible for making the policy’s payments? If the policy lapses, there is no coverage in place and thus no death benefit. You want to make sure there is a foolproof way to make sure the payment is always made, whether it’s an escrow officer, an employee of the fund/broker, or you yourself.
What is the broker’s commission? Are there any other fees involved? How do they affect your anticipated profits?
Who is responsible for finding out when the insured person passes away? If you’re working with an institutional investor, they will usually have a case manager who handles this. But if you’re investing on your own, you will need to handle this on your own, either by communicating with the insured person, their family members, and/or physician.
Do you have the life insurance protection you need? Before you become an investor, we can help make sure your own family’s needs are covered. Call (800) 521-7873 or click the button below to get a free quote!
