Knowing the basic timeline prior to submitting a case allows you to set expectations, which gives you and your client a better idea of what to expect. Below is the process and timeline we utilize at Provada, which is fairly typical of well-run Brokerage General Agencies. The first part of this post is specific to life insurance policies while life settlement processing is discussed at the end.

APPLICATION SUMBISSION:

• Allow 4-6 weeks for a simple application.
• Most Brokerage General Agencies (BGAs) process applications within 24 hours of receipt.
• If medical records are required, allow for 2 additional weeks. This can vary depending on the applicant’s doctor’s ability to get the records out to the BGA.

UNDERWRITING REQUIREMENTS:

• Clients are typically contacted by the paramedical firm with 24 hours of the requirements being ordered.
• BGAs are typically updated weekly by the paramedical facility.
• Once the exam is completed, results are received within 5-7 working days.
• An average turn around time of 10-14 working days for medical records ordered from doctors and medical facilities.

Read the rest of this entry »

Several life settlement providers have recently launched small face amount programs for policies under $500,000. Backed by large institutional funding, the "SFP" program is a simple and fast way to include Life Settlements in your insurance practice!

With just the application and illustration, your client can receive a competitive Life Settlement offer for qualifying policies!

• No medical records or life expectancy report required!
• Offer in 10 days or less!
• Move to closing fast!

How is this possible?

• Size of the Market - Policies of $25,000 to $500,000 comprise the vast majority of inforce policies. By targeting these policies, a large number of our producers should benefit from this program.
• Ease of the Process - Attending Physician’s Statements and Life Expectancy reports are not required to obtain an offer. Simply submit a special application and illustration, and that’s it!
• Tremendous Profits - The huge volume potential, combined with no out-of-pocket cost to obtain an offer, equals a highly profitable business.

WHY SELL A POLICY?

Life insurance policy owners find many reasons to consider a life settlement including:

• Underperforming policies: If a policy is performing worse than originally illustrated, the process of a life settlement can be used to purchase more affordable insurance unlikely to fail.  This is useful for both trustees of ILITs and individual policy owners.
• Unneeded policies: Policies that have outlived their usefulness are excellent settlement candidates. Changes in insurance needs, divorce, estate planning goals, and/or personal finances can make current life insurance programs obsolete.  Policy owners can settle unwanted and unneeded life insurance policies and then use the proceeds for any legitimate reason.
• Business changes:  “Key person” policies can be settled when an executive leaves the company.   Insurance used to fund “buy/sell” agreements becomes a settlement candidate when the agreement dissolves or is modified.  Failing policies within pension plans can be “rescued” in some instances with a life settlement.

WHAT TYPES OF POLICIES CAN BE SOLD?

Almost any life insurance policy, or even a variable annuity, may be sold if it meets established requirements. These include:

• Whole Life (if cash value is low)
• Universal Life (Basic UL, GUL, 2nd to die, etc.)
• Variable Life (security laws may apply)
• Term Life (once converted)
• Variable Annuities (particularly those with “high water mark” death benefits”

Policies most likely to receive higher offers have the following characteristics

• The insured is a senior with a life expectancy of less than 20 years;
• The face amount is over $100,000;
• The cash value is less than 30% of the face amount;
• There are no substantial loans on the policy; and
• There is a low premium-to-face amount value ratio.
• The policy is beyond the contestable and suicide periods.

Read the rest of this entry »