A life settlement broker to a lot of people doesn't seem to add much value to the life settlement process. They collect and organize documentation to support the sale of a life insurance policy, then present this information to life settlement providers for consideration and hopefully an offer. In addition, a life settlement broker outlays money to acquire the necessary documentation and pays for the overhead of having someone manage this process.

How much is my policy worth as a life settlement? That has to be the number one question we are asked. As with anything in a free market economy, something's value is only determined when a willing buyer and a willing seller agree.

For those outside of the life settlement industry the process of selling a life insurance policy would presumably be very straightforward. It conceivably starts with a senior that has an unwanted policy they would rather sell than let lapse or trade for the minimal cash surrender value. The senior enlists a life settlement broker who in turns brokers the best deal from a buyer, known as a life settlement provider. Ahhhhh if it were only that easy.

Recent life settlement cases have been a telling snapshot of the sometimes conflicting dynamics within the life settlement industry. It is no secret that life insurers often have a guarded view of the life settlement industry or anyone that is attempting to sell their existing life insurance policy. Life insurance companies would obviously rather have a policy owner let their policy lapse than have it stay in force and result in the death benefit payment.

Life settlements got interesting coverage in the two recent articles from well known media sources. The first was a NY Times article about life settlement securitization, entitled "Wall Street Pursues Profit in Bundles of Life Insurance". The second was in the Business Insider in an article entitled "10 Economic Bubbles in the Making".

Life settlement brokers sent out the first salvo at Amrita Financial on July 22, 2009. On that day, Forbes.com published an article entitled "Ways You're Getting Ripped Off". This article featured many different industries and rip offs, but at the top of the list was life settlements. Forbes.com didn't question the need for a life settlement or their legitimacy in the marketplace, rather the reporters focused on the opaque nature of life settlement transactions and unusual compensation structure for life settlement brokers.

Life settlement legislation is first and foremost supposed to protect seniors and those selling their policies. States establish life settlement legislation that does this through licensing, disclosure mandates and transparency requirements. In general the primary goal of most new state legislation is to ensure that seniors have all of the necessary facts to make the wisest financial decisions. In addition, new life settlement legislation prohibits fraud, STOLI's and other unsavory elements of the life settlement landscape.

It seems as though people don't like change and bring fear when presented with new ways of doing things. Life settlements in their modern form are relatively new. However, they have been around long enough to garner a reputation as a consumer friendly transaction and one that has a legitimate place in the marketplace.

In my last blog post, I gave a little bit of background information on the role and importance of life expectancy certificates in the life settlement transaction and industry. Over the past year, the life expectancy certificate has come to the forefront of the life settlement industry. Last fall a very well known and respected life expectancy provider held a major conference call with their customers. Meaning life settlement brokers and life settlement providers.

A life settlement seems pretty straightforward to the outsider looking in. Someone has a life insurance policy they want to sell and a financial institution wants to buy it. A price is agreed upon, the transaction is completed and the sale is made. Easy enough, right?