Life Settlement Companies
The Top Brokers and Providers
How Do Life Settlements Work?
The life settlement process is relatively straightforward. To sell your insurance policy, you need to contact a life settlement company. You’ll submit an application with the required paperwork, and the company will come back with an offer. If you accept that offer, you’ll receive a cash payout in exchange for ownership rights of your policy.
Life settlement payouts are typically for an amount higher than your policy’s cash surrender value, but less than the net death benefit.
Once the life settlement company secures ownership of your policy, they’re in charge of paying the premiums to keep the policy in effect. These companies either hold the plan until you pass away so they can receive the benefit, or they sell your plan on the secondary market to another investor.
People often pursue life settlements because they no longer need their life insurance policy and would rather have cash in their pocket. You can use the money received from a life settlement transaction however you’d like, including paying for long-term care needs or funding your retirement.
If you have a terminal illness and want to sell your policy, you may be eligible for a viatical settlement. A viatical is simply the name of life settlements designed for the terminally or chronically ill.
What is a Life Settlement Company?
Life settlement companies are the institutions that facilitate the purchase of life insurance policies from policyholders. Sometimes life settlement companies purchase policies directly; other times, they simply connect buyers with sellers.
If purchasing directly, a company pays the original policy owner a lump sum and takes over the premium payments; in return, the purchaser receives the death benefit when the policyholder passes.
There are two main types of life settlement companies: providers and brokers.
Life Settlement Brokers vs. Life Settlement Providers
The first step to selling your life insurance policy is to contact a trusted life settlement company. There are more than 30 companies that buy life insurance policies and even more brokers who can help you find a buyer and navigate the process.
There are unique advantages to working with companies, and there are unique advantages of working with a broker.
To help you make this critical decision, it’s essential to understand how the two operate.
What is a Life Settlement Broker?
Life settlement brokers are state licensed professionals who represent life insurance policyholders in the life settlement process and negotiate on their behalf with life settlement providers.
Importantly, brokers have a fiduciary duty to represent the policyholders best interest and must be licensed in the state of the policyholder.
For representation during the life settlement process, brokers take a commission, which is usually at least 10% of the final life settlement payout.
What is a Life Settlement Provider?
Life settlement providers are state licensed companies that directly purchase life insurance policies. Life settlement providers buy policies for their own accounts or on behalf of institutional investors.
Life settlement providers do not have a fiduciary responsibility to policyholders. Even though providers do not have a fiduciary duty, many insurance agents do, this means you always have someone on your side that is legally obligated to look out for your best interest.
Broker vs. Provider (Summary)
- Have a fiduciary duty.
- Represent life insurance policyholders and negotiate on their behalf with life settlement providers.
- Do not have a fiduciary responsibility.
- Purchase policies for their own accounts or on behalf of institutional investors.
Should You Choose a Broker or a Provider?
If you are confident in your ability to navigate the life settlement process and want to avoid the 10%+ commission structure, consider selling your policy directly to a provider. Selling directly to a provider can be intimidating, but it’s not impossible.
If you prefer to hire someone else to do the work for you, working with a broker makes sense. If you choose to work with a broker, they’ll take a part of the payout, but they’ll also represent you every step of the way.
Whatever option you choose, Mason Finance is here to help.
The life settlement industry is growing every year, meaning there are more providers and brokers than ever before.
We tested, called, and researched a wide range of life settlement brokers and providers to come up with our top 5 for each. These are the best in the business, and you can confidently work with any recommendation on this list and know your settlement will be handled safely and professionally.
Top 5 Life Settlement Brokers
Life settlement brokers represent life insurance policyholder’s in the settlement process. Brokers will guide you through the process, and you can be confident knowing that they have a fiduciary responsibility to act in your best interest.
Here are our top 5 life and viatical settlement brokers, in no particular order.
Ashar Group is a family-run business that’s been around for over 15 years. Founded in 2003, Ashar Group takes pride in their reputation for “doing things the right way” – and it shows.
When we called their main line to get more information on life settlements, there was no automated machine, and in under a minute we were talking directly to their CEO, Jon Mendelsohn.
Jon is one of the foremost experts in life settlements and writes extensively about the topic, but that didn’t stop him from giving us 30 minutes of his time. He didn’t hesitate to suggest some of his competitors and even advised us on how to recognize red flags with other providers/brokers – all for free and without obligation. Needless to say, Jon isn’t in the business of taking advantage of people; he’s in the business of helping them.
The company has an A+ rating from the better business bureau, and they strive to be very transparent with who qualifies. Licensed nationally, and with people on the ground in many major metropolitan areas, Ashar is an excellent choice for someone who wants to get a personal touch and have confidence in the person they’re doing business with.
Welcome Funds is the most tenured broker on our list, coming in with 18 years of life and viatical settlement experience.
Welcome Funds is well-known for being very professional during every step of the process. They provide free appraisals, handle third party life expectancy estimates (once you provide five years of medical history), and present your policy to every provider in your state. Since they go to so many providers, you can be sure you’re getting the best offer.
Like others on this list, Welcome Fund’s customer service was excellent. When we called them up, we were quickly greeted by a staff member who was both knowledgeable and patient on the phone.
Windsor Life Settlements
One of the first things we noticed about Windsor was their extensive library of life settlement resources, including a life settlement calculator and a primer on who qualifies for policies.
It was great to see a page specifically dedicated to the risks and considerations when getting a life settlement, such as high broker fees, privacy concerns, and an upfront warning about the length of the life settlement process. With large dollar amounts at stake, it’s reassuring to see life settlement companies that take time to educate customers on the pitfalls of the industry, even if there’s not a monetary benefit for them. They also have a cautionary article, 5 reasons not to get a life settlement.
Genesis Life Settlements
Genesis has a lot of unique qualities that made them an obvious choice for our top 5 list.
First off is speed. While many companies take 90-120 days to finalize a settlement, Genesis can put money in your pocket in half that amount of time. Part of the reason for their speediness is that they handle everything needed for paperwork – including seeking out your medical records and illustrations for you. All you need to do is sign three basic forms with your information, and release them to gather documentation on your behalf.
On top of that, they underwrite policies that others won’t. If another broker says you’re too young or your policy is too small, Genesis will take your application and let the providers decide for themselves.
Licensed nationally, Genesis has a transparent bid process to go with their easy application. A small company of five people, they take the time to show the steps of your selling process, so you can rest assured you’re getting the best price for your settlement.
Amrita excels in convenience thanks to their proprietary software. Sound complicated? It’s not. And that’s why we love it.
Amrita is not like a traditional broker. Amrita is closer to a software application that acts as a broker, which puts the power in your hands.
Amrita is one of the only sites that has an online portal that allows you to view, accept and decline bids right from your own computer, instead of having to communicate back and forth with a broker.
If you want to complete your entire settlement from your computer, Amrita might be the perfect option.
Their online calculator reflects their commitment to a simple, yet effective online presence, and is arguably the best one we encountered on this list.
Discover your policy value in seconds:
Top 5 Life Settlement Providers
You can go direct to a life settlement provider and avoid some of the commission fees. Life settlement providers purchase policies for their own portfolios or for the portfolios of large institutional investors. Since providers are either the final buyer or directly connected to the final buyer, commission fees are usually lower compared to a broker.
Here are our top 5 life and viatical settlement providers based on number of offers, again in no particular order. We’ve also highlighted the areas each performed best.
Magna Life Settlements
- Clear and straightforward application process
- Checklist for paperwork and application process
- Instant estimate calculator
- Licensed to do business in all 50 states
One of the nation’s largest and most trusted providers, Magna Life Settlements has reached the top due to their speed and efficiency.
Their homepage features an easy-to-use calculator to estimate your settlement’s worth (and your eligibility) in seconds. Additionally, their policyholder settlement page has a great checklist of paperwork needed, a 5 step breakdown of the process, and a downloadable application. The listed pre-approval wait time can be 5-7 days, which is average.
A big plus is Magna’s size. They are licensed to assist policyholders in all 50 states.
They’re also a proud member of the Life Insurance Settlement Association, which means they abide by LISA’s Code of Ethics and Standards of Professional Conduct.
- Has downloadable forms by state
- Has a “Cancer Financial Assistance” consultation page
The smallest provider by volume on our list, Berkshire Settlements is an excellent provider for those who know what they want and are seeking specificity. The smaller size ensures that you get the attention you deserve and are not just treated like a number.
We love that they have state-specific application paperwork, which is very useful considering how much the rules and regulations vary by state. Berkshire also features a consultation explicitly created for those seeking a viatical settlement due to cancer.
- Excellent customer service
- Established reputation
- Largest life settlement provider in the nation
Coventry is currently the largest policy buyer in the industry. But despite their large volume, Coventry maintains its personal touch. In fact, they had the most responsive and helpful customer service out of ever provider on our list.
Their number goes directly to an individual (not a machine operator), and there was no wait time in the several times we tried.
When you read about Coventry, it is clear that they are strong supporters of life settlement regulations to protect consumers.
- Industry leader in speed
- Large purchase range
- Helpful and simple learning center
Abacus is one of the leaders in the growing direct-to-consumer market. One of the most significant advantages of a direct-to-consumer business model is the expedited processing time.
We’ve heard of Abacus sending out offers in as little as 24 hours!
A one-day turnaround is by far the quickest pre-approval process we’ve seen, as the average time to hear back is 5-7 days. The site even features ‘Abacus Express’ for agents, streamlining the speed of their process across the board.
Another benefit of Abacus is that they accept a wide range of policies – most notably the purchasing of term policies – making them an excellent option for people who don’t have permanent policies. Their website also features a basic learning center for those still new to the process.
- Easy to use calculator
- Large policy age range
Another smaller provider on our list, Q Capital is great for policyholders seeking simplicity. Their questionnaire for estimated eligibility is only 3 questions and requires no information that’s not readily available. However, the fewer questions asked upfront, the more likely the policy estimate will differ from the offer.
However, the calculator does appear to qualify a much broader range of applications than most. For someone who considers themselves healthy, Q Capital’s calculator returns a positive qualification at 70 years old, as opposed to Magna’s 85.
Setting up a consultation only requires contact information, whereas most providers ask for medical information right away.
Q capital is currently not licensed in all 50 states.
Whether you prefer speed, an established reputation, or an easy online process, there is a life settlement company for you.
If you’re still confused about life settlements, check out our comprehensive overview.
Top 5 Life Settlement Brokers (Quick List)
- Ashar Group
- Welcome Funds
- Windsor Life Settlements
- Genesis Life Settlements
- Amrita Financial
Top 5 Life Settlement Providers (Quick List)
- Magna Life Settlements
- Berkshire Settlements
- Abacus Settlements
- Q Capital