There are a lot of factors that go into determining the value of a life settlement. However, none are as important as your ability to achieve as much value as possible for your clients through careful and strategic persuasion with prospective buyers. To help you negotiate successfully, here are five useful tips for getting your client the best settlement the market allows.

1. Do Your Homework Ahead of Time
Because life settlements can widely vary in price, it will be very important that you research your options ahead of time. Shop around and get as many different quotes as possible.
 
Whatever you do, don’t take the first offer you receive because it may be too low. Know which aspects of your client's life insurance situation represent the most value, and try to capitalize on these points as much as possible.
 
 
2. Calibrate the Expectations
When you’re negotiating, a smart tactic is to lead with a number that is higher than the price you wish to receive. This not only gives you some wiggle room for negotiation, but it also helps to calibrate the expectations of your potential buyer. Plus, you never know when this higher lead price might be the one that gets accepted.
 
You may be asked to give a range of what kind of bids you expect to receive - never do this. When you do, it will be like giving your prospective buyer an automatic pass to take the lowest number you mentioned. Instead, state one specific number, and make sure it’s a high one.
 
 
3. Never Make a Deal Under Pressure
One of the most common ways a potential buyer will try to box you into a deal is by telling you that it expires if you don’t act soon. Almost always this is just an illusion designed to make you act out of emotion instead of logic.
 
Rather than give in to pressure, call their bluff. Consider the offer as you normally would while continuing to shop around for the best deal possible. Chances are they may still offer you the same deal at a later time or possibly make you an even better one if they were really serious.
 
 
4. Always Deal with the Real Decision Maker
There’s nothing worse than putting a lot of time and energy into negotiating a life settlement only to have your potential buyer come back and tell you their boss cannot approve the deal.
 
Car dealerships have been using this technique for decades and it's recognized as the “good cop, bad cop” routine. It’s a way to tell you “no” while still maintaining an amicable relationship in the hopes that you will accept their counter-offer.
 
To avoid this hassle, make sure you’re dealing with the decision maker upfront. Ask about the decision process and how many other parties will be involved. Not only will this speed things up, but it could also potentially lead to a better overall price for your client.
 
 
5. Don’t Compromise
In his book “Never Split the Difference”, author Chris Voss beautifully illustrates why you should never compromise on a deal using something he calls the black shoe–brown shoe analogy.
 
Think of a situation where you’re going to wear a suit. You think you should wear black shoes while your spouse thinks you should wear brown shoes. So you compromise and wear one black shoe and one brown shoe.
 
As silly as that may sound, that’s exactly what happens when we compromise. In the end, no one wins. You both simply take a shortcut to an outcome that neither of you are completely satisfied with.
 
The takeaway: Don’t meet in the middle just to secure a deal. Stick to your guns and hold out for the price you’re looking to achieve. Not only will it result in a happier client, but it will also result in a higher commission for you as well.
 
If you can’t agree, then be prepared to walk away. There will always be another opportunity to negotiate your client's life settlement with another prospective buyer. For more tips, subscribe to our blog and stay updated on life settlements with the Life Insurance Settlement Association (LISA).