In the Agent Media/LISA 2011 Life Settlement Market Study, nearly 25 percent of agents said that greater consumer awareness of life settlements would help them foster more settlement opportunities.
So, how can agents best promote this awareness?
- Maintain your own knowledge of settlements.
- Consider partnering with a settlement provider or settlement veteran.
- Take settlement news developments as an opportunity to communicate with your clients.
- Realize the importance of communicating the safety -- for all parties involved -- that comes with an increasingly regulated industry.
- Make settlements part of your initial and ongoing client discussions about life insurance; when clients know more about future opportunities and benefits, your job becomes much easier.
Stay abreast
In order to educate clients about the secondary market for life insurance, you must have complete, up-to-date lessons to share with your clients. That means being able to share the latest information about everything from when a client may qualify for a settlement (not all policies or all insureds qualify, and even if they do, a settlement is not appropriate for every circumstance) to settlement regulation (widespread effective regulation makes settlements safe for consumers -- another strong selling point).
While it is good for consumers to know of potential settlement risks, they shouldn't be frightened away from a legitimate alternative when a settlement may be a viable option. That means you'll need to have at least a basic understanding of any current anti-settlement propaganda and, again, the regulations that guide the process and protect all parties in legitimate transactions.
If you already know the settlement basics and stay abreast of settlement news through industry media, consider also partnering with a colleague who has more experience, or with a settlement provider. In fact, a provider can help pair you with another advisor experienced in settlements.
Opportunities for industry, opportunities for you
With the economy itself improving this year, capital is returning to the markets in new and broader ways, including the secondary market for life insurance. This bodes well for settlements, which flagged a bit in recent years.
For you, this could mean greater opportunities to partner with a settlement provider, as they'll be looking to improve their settlement pipelines. Greater industry opportunity means you'll be able to present more of your qualified clients with the settlement option.
Share what you know
However you stay ahead of the settlement knowledge curve, be sure to share the news of the evolving secondary life insurance market with existing and potential clients. Communicate settlements news through:
- Calls
- Letters
- Newsletters (electronic or otherwise)
- Articles (for organizational newsletters, the local media, consumer websites)
- Speaking engagements
- Social media (Facebook, LinkedIn, blogs)
Articles, speaking engagements, and social media positioning are all excellent ways to present yourself as a settlement expert. Ultimately, clients, media representatives, and others will be saying, "So, tell me about these settlements ..."
The premise is simple: Just as you look for opportunities for multiple touches with clients and prospects about your other products, you must incorporate consistent, iterative messages about settlements into your marketing strategy. By priming clients and prospects about the often-overlooked dynamic nature of life insurance and its potential exit strategies, you can help them understand the inherent value of life policies that are no longer wanted, needed, performing, or affordable.
A golden opportunity
Many agents (and other professionals who deal with life insurance) will be forced to understand and communicate more about life settlements this year as a number of states adopt the new National Council of Insurance Legislators (NCOIL) Life Settlements Model Act and their Life Insurance Consumer Disclosure Model Act. Among other things, the Disclosure Model Act requires carriers to notify consumers of the settlement option when clients are close to surrendering or lapsing their policies.
So, the good news is that consumers will automatically get a bit more information about settlements; the bad news is that they will get the information late in the game and from a source, such as a carrier, that may grudgingly present the information. Get ahead of the curve in circumstances like these. Learn about any potential regulatory changes in the settlements industry, and use them as a positive opportunity to proactively educate clients and potential clients.
Create your own opportunities
You don't have to wait for new regulation or other industry developments to communicate settlement facts and opportunities to your clients and prospects. Broach the topic of settlements when you begin the policy sales process. Even if the client never needs a settlement, you will have helped them understand the flexibility and more accurate valuation of life insurance.
Ultimately, it's incumbent upon you to help drive consumer awareness of life settlements. How will you incorporate settlements into your next client communication? Start with something as simple as this:
"The 2011 Life Settlement Market Study came out this month, and I realized settlements are a topic about which I'd like to share a bit more information ..."
M. Bryan Freeman has been a licensed insurance agent for 31 years and has worked in the secondary market for life insurance for 21 years. He is the founder and president of Habersham Funding LLC, a life settlement provider. He can be reached via 888-874-2402 or
bfreeman@habershamfunding.com.
More life settlement coverage from ASJ
Life Settlement Regulation: GAO, SEC Recommendations Don't Hold Water
Life Settlements Poised for 'Natural Growth,' but Producers Still Lacking in Education
Life Settlements: A Good Idea Whose Time Has Passed?
Using Life Settlements as an Estate Planning Tool
Life Settlement Regulations Make It Harder to Avoid the Market
