How to Be Life Settlement Broker - Job Description, Skills, and Interview Questions

The increase in life settlement brokers has caused a rise in the number of individuals seeking to cash out their life insurance policies. As a result, policyholders are receiving larger lump sum disbursements when they opt to sell their policies, allowing them to use the money for retirement, medical costs, or other financial needs. Life settlement brokers are also able to provide valuable information on the sale of life insurance policies, helping policyholders make informed decisions about their investments. With the help of a life settlement broker, policyholders can have peace of mind that they are receiving the best possible value for their life insurance policy.

Steps How to Become

  1. Obtain a Life Insurance License. Before you can become a life settlement broker, you must obtain a life insurance license in your state. You will need to meet certain educational, professional, and financial requirements to qualify for a license.
  2. Obtain Training in Life Settlements. Once you have obtained your life insurance license, you will need to obtain specialized training in life settlements. To find training programs, contact your state insurance department or a local insurance school.
  3. Join a Life Settlement Network. Once you have completed your training, you should join a life settlement network. This will allow you to connect with other life settlement brokers, as well as potential clients.
  4. Develop Your Business Plan. Before you can begin working as a life settlement broker, you will need to develop a detailed business plan. This should include information about your target market, services offered, expected costs and revenue, and marketing strategy.
  5. Promote Your Business. Once your business plan is complete, you will need to start promoting your services. Consider creating a website and using social media to reach potential clients. You should also attend industry events and join industry associations to network with other life settlement brokers.
  6. Stay Up-to-Date. It is important that you stay up-to-date on changes in the life settlement industry. This will help you remain competitive and ensure that you are providing the best services to your clients.
Being a life settlement broker can be a very lucrative career, but it’s important to stay up to date and qualified in order to maintain success. To ensure that one is qualified and current in the industry, it is necessary to take continuing education courses, attend seminars, and keep up with all of the recent industry changes. Additionally, staying knowledgeable about the laws and regulations related to life settlements is essential, as these laws and regulations can vary from state to state. By being aware of the latest news, trends, and developments in the life settlement industry, brokers can stay ahead of the curve and ensure that they are providing the best services to their clients.

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Job Description

  1. Develop and implement strategies to generate qualified life settlements leads.
  2. Analyze financial data to determine the value of life settlements.
  3. Negotiate and execute life settlement contracts with life insurance companies.
  4. Act as a liaison between policyholders, life insurance companies, and investors.
  5. Stay abreast of changes in the life settlement industry, including laws and regulations.
  6. Prepare and present life settlement proposals to potential investors.
  7. Provide policyholder education on the life settlement process.
  8. Develop relationships with potential investors to maximize life settlement opportunities.
  9. Gather and verify information from policyholders to ensure accuracy in the life settlement process.
  10. Monitor and review all life settlement transactions to ensure compliance with industry standards.

Skills and Competencies to Have

  1. Knowledge of the life settlement industry
  2. Expertise in the legal and regulatory requirements of life settlements
  3. Understanding of life insurance products and their features
  4. Ability to evaluate and analyze life insurance policies
  5. Negotiation skills and an ability to build strong relationships with potential buyers
  6. Proficiency in financial mathematics and analysis
  7. Ability to conduct due diligence activities
  8. Understanding of tax and estate planning concepts
  9. Knowledge of the secondary market for life settlements
  10. Familiarity with computer systems and software used in the life settlement process

Effective communication skills are essential for any successful life settlement broker. An effective life settlement broker must be able to communicate with clients, insurers, and other industry professionals in a clear and concise manner. They must have the ability to explain the terms and details of the settlement to those involved in the process, as well as be able to successfully negotiate the best deal for their clients.

This requires a good understanding of the life settlement industry and its regulations, as well as being able to effectively convey information to others. a life settlement broker should be organized and have excellent problem-solving skills to ensure that they are able to swiftly and efficiently handle any issues that may arise. By having all of these skills, a life settlement broker is more likely to be successful in their role and provide the best outcome for their clients.

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Frequent Interview Questions

  • What experience do you have in the life settlement industry?
  • How would you approach prospecting potential clients?
  • What strategies do you use to cultivate relationships with clients?
  • How do you ensure that the terms of the life settlement are in the best interests of the client?
  • How do you stay informed of changes in the life settlement industry?
  • What processes do you use to ensure a seamless settlement process?
  • How do you ensure that you are compliant with all applicable laws and regulations?
  • What challenges have you faced in the life settlement industry and how did you overcome them?
  • Describe a time when you had to negotiate a complex life settlement transaction.
  • How do you handle difficult conversations with clients who have questions or concerns about their life settlements?

Common Tools in Industry

  1. Life Settlement Calculator. A tool used to calculate the cost of a life settlement and the potential payout from it. (eg: PolicyGenius Life Settlement Calculator)
  2. Underwriting Software. Software used by life settlement brokers to assess potential life settlements. (eg: VidaVest Underwriting Software)
  3. Client Management System. Software used to store and manage client information. (eg: HubSpot CRM)
  4. Compliance Software. Software used to ensure that life settlement brokers comply with all applicable laws and regulations. (eg: ComplianceEase)
  5. Life Settlement Database. A database used to compare and analyze life settlements. (eg: Lifeline Life Settlement Database)
  6. Financial Modeling Software. Software used to create financial models to help assess the value of a life settlement. (eg: Financial Modeling Pro)
  7. Negotiation Software. Software used to help with the negotiation process of life settlements. (eg: Negotiator Pro)

Professional Organizations to Know

  1. Life Insurance Settlement Association (LISA)
  2. National Association of Insurance and Financial Advisors (NAIFA)
  3. American Association for Long-Term Care Insurance (AALTCI)
  4. National Association of Professional Life Settlement Providers (NAPLSP)
  5. Life Settlements Brokers Association (LSBA)
  6. American Academy of Financial Management (AAFM)
  7. Society of Financial Service Professionals (SFSP)
  8. Financial Industry Regulatory Authority (FINRA)
  9. Association for Advanced Life Underwriting (AALU)
  10. National Association of Insurance Commissioners (NAIC)

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Common Important Terms

  1. Life Insurance Policy. A contract between an individual and an insurance company that pays out a sum of money to a designated beneficiary upon the death of the insured person.
  2. Beneficiary. An individual or entity designated to receive the benefits of a life insurance policy or other financial instrument, such as annuities or trusts.
  3. Viatical Settlement. A life settlement in which the insured has been diagnosed with a terminal illness or has a life expectancy of less than two years.
  4. Life Settlement Provider. A company that specializes in buying and selling life insurance policies for their clients.
  5. Underwriting. The process by which insurance companies evaluate the eligibility of an insured individual for a life insurance policy.
  6. Reinsurance. Insurance purchased by an insurance company to protect itself from the risk of financial loss due to unexpected claims made by policyholders.
  7. Annuity. A financial product sold by an insurance company that provides a guaranteed stream of income for a fixed period of time.

Frequently Asked Questions

Q1: What is Life Settlement Broker? A1: A Life Settlement Broker is a professional who facilitates the sale of a life insurance policy from the policyholder to an institutional investor. Q2: What are the benefits of working with a Life Settlement Broker? A2: Working with a Life Settlement Broker allows the policyholder to receive a lump sum cash payment that is typically much more than the cash surrender value of the policy. It also provides a liquidity solution for policyholders who need access to funds and may not otherwise have the option to do so. Q3: How does a Life Settlement Broker get compensated? A3: A Life Settlement Broker typically receives a commission payment from the investor for facilitating the life settlement transaction. This commission is usually a percentage of the purchase price and is paid at closing. Q4: What types of life insurance policies are eligible for a life settlement? A4: Most types of life insurance policies that are at least two years old and have a face value greater than $100,000 are eligible for a life settlement. Q5: Who typically buys life insurance policies in a life settlement transaction? A5: Institutional investors, such as hedge funds, private equity firms, and banks, typically buy life insurance policies in a life settlement transaction.

Web Resources

  • (PDF) LIFE SETTLEMENT POLICY | Mega Puspita Pertiwi
  • Ashar Group: Brokers and Co-opetition in the Life Settlement …
  • Wash. Admin. Code § 284-97-030 - Licensing life settlement brokers
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