Forty-three states and Puerto Rico have regulations in place that provide significant protection for consumers concerning the sale of a life insurance policy. Nine of those states require insurance companies to disclose alternatives to lapsing or surrendering a life insurance policy when a policy is in jeopardy of lapsing, including the life settlement option.
In all buy 7 states, life settlement providers must be licensed by the Insurance Department of the state where the policyowner resides.
Your client’s financial and health information must be kept secure by the life settlement company per multiple regulations, including HIPAA regulations. The company must provide a HIPAA authorization form stating how any information collected is used.
Because life settlements are legal and fully regulated in states where 90% of U.S. residents live, they are recognized as a safe—and tremendously valuable—alternative to letting a policy lapse or surrendering it for considerably less than it might be worth in a life settlement.
If your client no longer needs their life insurance policy or can no longer afford it, getting a policy appraisal is an excellent place to start. Lighthouse Life offers an online calculator to help you estimate how much your client’s policy could be worth in a life settlement.
If you have additional questions, call us at 1-855-230-0800, and we’ll be happy to provide you with the resources you need to present life settlements as a safe lapse or surrender alternative to your clients.
1 Life Settlements – The Growth Continues, Conning, p. 38, October 2021