An advisor’s sole purpose in a life settlement transaction is to protect their client.

In addition to representing their client’s best interests, an advisor should confer with state laws to ensure all needs are being met and laws and regulations are being followed by all parties.

The following is an abbreviated list of the tasks an advisor should perform during a life settlement transaction:

  • Use multiple criteria to identify a life settlement firm to help facilitate the settling of a policy and minimize pitfalls
  • Select a life settlement broker or life settlement provider to conduct the transaction
  • Help clients understand the fair market value of their policies and secure the best offer
  • Verify licenses, if required, of all parties involved in the transaction
  • Ensure clients receive all required disclosures in applicable states
  • Review/Sign all applicable forms
  • Confirm which state law governs or controls the transaction
  • Review privacy and HIPAA/GLBA laws and forms for compliance (Note: also review contact requirements for insureds about health information)
  • Closely review and sign all powers of attorney
  • Review rescission rights with client
  • Ensure compensation has been disclosed, if required, and is not excessive

This list is by no means limited to the tasks and issues an advisor should review before, during and after engaging in a life settlement. As the client’s fiduciary, an advisor should go above and beyond to ensure their client is protected.