[Part 3] How to overcome 20 Life Settlement Hurdles
The Insurance Company

In part 3 of the series, we describe how life insurance companies (carriers) may contribute to the difficulties in getting a timely Life Settlement.

Issue #18: Most carriers delay creating life insurance premium illustrations.

Life Settlements could be 30% faster if carriers would just do their jobs promptly.

To issue binding Life Settlement quotes, Life Settlement Providers must know the level annual cost of premiums to age 100. Carriers know that such an illustration is an essential part of a Life Settlement transaction. An illustration can be done in 20 minutes, but carriers usually take three or more weeks. Life Settlement Brokers secure these illustrations with cooperative carriers. When carriers are obstructive, Policy Owners must get involved.

Issue #19: Some carriers insist on working only with the Policy Owner

Some carriers insist on working directly with the Policy Owner, and a few of these require the Owner to work with a local agent. Life Settlement Brokers are familiar with these procedures and work closely with the Owner.

Issue #20: Carriers may change the options for Term conversion

Each Convertible Term policy outlines the procedure for converting to a permanent plan of life insurance. In recent years some carriers have limited changed the conversion option to a more expensive form of Universal Life or only Whole Life. As a result, the new policy will be costlier than before and thus less attractive for Life Settlements. Policy changes must be approved by state regulators, but the Owner may not understand the increased cost of Conversion until the Life Settlement Broker explains what has happened.


These are three ways that carriers drag out the Life Settlement process.

Life Settlement Brokers are well aware of their methods and know how to make them perform.

This concludes our three-part series covering Life Settlement hurdles.

  • Part 1: Life insurance policy issues
    • Issue 1: Term Conversion deadline
    • Issue 2: Policy Grace period
    • Issue 3: Policy lapsation
    • Issue 4: 24-Month Contestability and Suicide Exclusion clauses
    • Issue 5: Legal Assignment of some death benefit
    • Issue 6: Policy domicile state regulations
    • Issue 7: Cost of Insurance increases
    • Issue 8: Policy age
    • Issue 9: Flawed Trust document
    • Issue 10: Group Life Insurance
    • Issue 11: Issue 1: Whole Life Insurance
    • Issue 12: No ADB (Accelerated Death Benefit) terminal illness feature
  • Part 2: The Insured and/or the Policy Owner
    • Issue #13: The Insured’s health has not changed since policy issuance
    • Issue #14: Is Power of Attorney needed for the Insured or Owner if other than Insured?
    • Issue #15: Policy Owner’s pending bankruptcy has not been discharged.
    • Issue #16: Owner’s pending lawsuits or legal action
    • Issue #17: The Owner is having problems paying premiums on a timely basis
  • Part 3: The Insurance Company (Carrier)
    • Issue #18: Most carriers delay creating life insurance premium illustrations
    • Issue #19: Some carriers insist on working only with the Policy Owner
    • Issue #20: Carriers may change the options for Term Conversion