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Why Competitive Bidding Can Produce a Better Life Settlement Offer
By Saul L. Appel, CLU®, ChFC®
Life settlement buyers do not all value policies the same way. Each buyer has its own return requirements, funding costs, underwriting methods, policy preferences, and portfolio needs. As a result, one buyer may decline a policy while another sees an attractive opportunity.
Competitive bidding can help reveal the market value of a policy. When appropriate buyers receive the same accurate information, their offers can be compared on price and terms. A higher headline offer is important, but it is not the only consideration. The owner should also review closing conditions, timing, privacy provisions, required health updates, and the financial strength and experience of the parties involved.
A properly prepared case is more likely to receive serious attention. Buyers need current medical information, a reliable in-force illustration, premium requirements, ownership documents, and disclosure of loans or other policy restrictions. Incomplete or inconsistent information weakens the process.
Competition does not guarantee multiple offers or a specific price. Some policies will attract only one buyer, and others may receive no offer. The purpose is to test the market responsibly rather than assume that the first number is the best available result.
Before accepting or rejecting an offer, compare it with the policy’s cash surrender value and the cost of keeping the coverage.
Request a confidential market review at Policy-Cash.com.
Saul L. Appel, CLU®, ChFC® | President, Appel Financial, Inc. | 50+ years experience