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,
• or a term policy coming to the end of its conversion period.

Additionally, if a producer has educated their clients and centers of influence about life settlements, their clients may actually initiate the life settlement conversation before surrendering their policy or letting it lapse.

But can a producer actively seek and cold call for life settlement prospects?

We always approach this topic with a great deal of trepidation. Life insurance on older insureds that have had some decline in health since the policy was issued are the prime prospects for a life settlement. However, because of the changes in their health, their 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, these people can be legitimately helped by a life settlement.

First and foremost 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.

So yes, it is possible to cold call qualified candidates asking the question: Do you have too much life insurance? This of course is the opposite of what life insurance producers have been trained to do since they first entered the business, but, nonetheless, can be helpful to people who have life insurance policies they no longer want, need or can afford. However, the universe of prospects who need insurance is much larger than those who would benefit from a life settlement.

A more likely scenario is the traditional life insurance cold call and the common objection: “I already have enough life insurance.” If you think you are talking to a prospect old enough to qualify (65+), an interesting pivot from this response could be: “Well maybe you have too much life insurance, and I might be able to help you with that as well.”

The foundation of your life settlement activity should really be your existing clients, by keeping aware of their life changes, financial changes, health changes, the status of their policies and by building their awareness that life settlements exist. You don’t want your senior clients to be part of a growing group of policyholders that let their contracts lapse, or surrender them, only to find out that their policy could have been worth a substantial amount of money in the life settlement market.

As situations arise, please be sure to give us a call so that we can help you to determine if a policy will qualify for a settlement. As we are known to say, “it can’t hurt to try – it can only hurt not to!”