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What Can Clients Expect After the Life Settlement Sale?

One of the common questions from clients in life insurance settlements is how the companies know when to collect the death benefit. These sellers worry that the policy-tracking process will be intrusive and uncomfortable.

The industry has, in fact, honed processes and procedures over the past 20 years that make the entire post-settlement experience easy and discreet.

Once a life settlement is approved, policy ownership is transferred and commissions are doled out, what happens next? How does a settlement company keep track of the original policyholders?

The post-settlement process and relationship with policyholders are rarely-discussed aspects of life settlement transactions, but they aren’t macabre. In fact, settlement company employees and their clients often develop a mutually beneficial and rewarding relationship after the policy has been sold. Below is a description of what policy sellers and loved ones can expect to experience after receiving a settlement.

Who will be talking to your clients?

If possible, work with a life settlement provider that employs certified nurse practitioners in its client services department. This practice isn’t required by industry regulations, but nurses are uniquely qualified and instrumental when speaking to policy sellers. Nurses are trained to be empathetic as they discuss relatively difficult topics such as updating medical records, describing current health conditions and, ultimately, reporting the death of a loved one.

Before signing on the dotted line

The life settlement provider should conduct a pre-funding telephone interview during which the policyholder will need to provide questions and answers only he or she recognizes and can answer correctly. These questions will serve to screen future calls with the settlement recipient to ensure that accounts and records remain accurate, private and safe.

During this interview, policyholders also determine several important decisions

regarding the nature of their relationship with the settlement provider, including selecting their preferred method of communication, assigning a designated contact person, and providing the contact information of three separate, trusted secondary contact people in the event the policy seller and/or designated contact person is unresponsive. The primary contact can be the policy seller, a close relative, a roommate or even the life insurance agent. Policyholders also select how they wish to be contacted and how they wish to respond (typically via phone call, email or postcard).

Show me the money

Policyholders should be able to receive funds from a life settlement in one of two ways: as a wire transfer to a checking or savings account of their choice or as a certified check delivered via FedEx. Settlement providers often recommend opting for the wire transfer because funds are wired immediately. However, if policyholders prefer a physical check, the check typically arrives within three business days (depending on the state of residence). As soon as policyholders receive the settlement funds, they can instantly use the money. Often, clients use the settlement funds to pay off any outstanding debts, transfer the money to a savings account, finance medical bills or retirement, donate the money to a family member or charity, or go on a dream vacation.

Keeping in touch

Ask a life settlement provider how often the company contacts settlement recipients. Ideally, providers should contact a policy seller only once every six months. Regardless of the seller’s deteriorating health conditions, unexpected relocations or other major life changes, a legitimate settlement provider should never increase the frequency of tracking calls. Several states prohibit client tracking more frequently than three months; most prohibit frequency more often than six months. A settlement company should practice a high level of respect toward clients’ privacy and personal time and take extra precaution to avoid any intrusion on this freedom.

There is only one exception to the six-month contact industry standard. If a policy seller becomes unemployed due to an injury or disability, the settlement provider may provide more frequent contact temporarily. This is because the provider needs to file a disability claim with the insurance company to waive premium payments for the duration of the policy seller’s unemployment.

Otherwise, every six months the policyholder is responsible for answering the same questions, which should look something like these: Has your address changed in the past six months, or do you expect it to change within the next six months? Has your health condition changed in the past six months? When was the last time you visited a physician?

If the policy seller opts for contact via phone, the calls can be completed in less than 10 minutes. A reputable settlement provider should strive to maintain a consistent contact person for each policy seller so the seller can speak with the same person every six months and develop a relationship with that company representative. 

Situations where a policy seller does not respond to tracking calls are extremely rare. However, if a seller does actively avoid contact with a settlement provider, agents and sellers can be confident that credit bureau information will never be requested or used in order to track down an unresponsive seller. In the past, provider companies have successfully reached out to sellers’ neighbors in order to contact sellers who had moved to another address. As a precaution, before accepting a settlement offer, sellers must sign a form granting a settlement provider access to updated medical records and power of attorney in case they do not volunteer information.

When clients should contact their settlement providers

Policy sellers should contact their settlement providers in between six-month tracking periods if they have moved to another residence or relocated to a nursing home or hospice, if they stop working due to a disability, if they experience a major change in health or if they change primary physicians. If the seller’s health is deteriorating quickly, the seller or a trusted contact person should contact the provider directly. Ultimately, when the seller dies, the provider company needs a certified copy of the death certificate so that it can file the insurance claim. As a cross-reference, a settlement provider usually pulls a Social Security death report every month to double-check the status of its clients against a death master file.

What are tracking calls like?

Most clients find the tracking calls to be a positive, memorable experience. Tracking callers frequently are the only people to phone elderly policy sellers in several months. Many calls last one hour due to friendly conversation, and some calls have lasted as long as three hours. Many sellers don’t have anyone else to speak to, and most confess that they miss their grandchildren.

Often, policy sellers develop relationships, and frequently begin friendships, with their settlement provider tracking representative. In turn, tracking callers are famous in the settlement industry for how much they genuinely enjoy making calls and conversing with policy sellers. Provider company tracking representatives often comment that they have learned a lot about how the world has changed and about what it was like growing up during World War II and other historic events. Callers also witness policy sellers, typically 80 years old or older, as they adapt to and experience new technology. Policy sellers have called their provider representative simply to announce their excitement about using a computer for the first time or sending their first emails.

An industry still reinventing itself

Life settlements first entered the financial planning scene during the 1980s as a way to help the terminally ill. Redefined for seniors with life insurance policies they don’t need or can’t afford, the life settlement industry has evolved into a fast-growing, regulated and sophisticated secondary insurance market. All parties participating in settlement transactions are winners; the policy seller is paid up front (and paid significantly more than he or she would receive by surrendering the policy), the life insurance company continues to collect more premiums and the agent receives commissions.

Policy tracking has always been an integral part of the life settlement transaction. Although some may find the task creepy, the procedures and techniques honed over the past 20 years make tracking relatively seamless to the policyholder. Agents and individuals who are interested in life settlements should always inquire about tracking methods when evaluating provider companies.


Stephen E. Terrell is senior vice president of The Lifeline Program, a life settlement provider based in Atlanta, Ga. For more information, call 770-724-7300, visit or follow him on Twitter @LifelineProgram. He may also be contacted di [email protected].

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