Life Settlement Transaction Process: 8 Easy-to-Follow Steps

Do you have a life settlement that you want to transact? It can be a good source of money in your old age. The transaction process of a life settlement is however a little daunting especially if you get started without sufficient knowledge of the process.  It is important that you inquire everything about a life settlement transaction from an experienced company. You should understand the parties involved like the; policy owner, advisors, investors, life settlement providers, life expectancy underwriters, life settlement companies, and the escrow agents. They all play different roles in the process. The process is also undertaken procedurally so let’s get started with the steps you should follow when transacting a life settlement:

Apply for a Life Settlement Transaction

This is your initial step. Apply with a life settlement company of your choice. In the application ensure you include details on your life insurance policies and your details too. The size of your policy, the accumulated cash proceeds, and premiums are also a must-include in the application form. Life insurance strategists at Capital strategies recommend that you look out for the life settlements in California, Florida, Texas, or whichever state you are in. This can help you understand the state-specific life settlement policies which can significantly influence the success or failure of your transaction. You should also ensure that the company you choose to transact with is registered under your specific state laws otherwise you risk losing your life-long investment.

Gather All the Relevant Documents

It is not enough that you fill-up the life settlement transaction application form. You likewise need to contact and list all the eligible healthcare service providers who can provide the involved parties with all your medical records. Remember to sign and attest to the release of your medical documents to your life settlement company.  Confirm that the medical practitioners follow the legal transmission process.

Confirm Your Details

As you shall be requested by your life settlement insurance company, confirm all the information on your documents. If your company officials need any clarification provide them with the proper details as this can facilitate the efficiency of the underwriting process. Your life expectancy underwriter can only prepare your life expectancy report accurately if you supply the accurate details. Details such as the policy packages you present to your prospective buyers are also key to supply to the underwriters as this speeds up the transaction process.

Bidding the Auction

Your life insurance with your permission can proceed to bid the auction. The company can turn your policy to bidding auction managers or it can facilitate the bidding itself. Several online auctions can be used by your company and therefore, it is important that you stay informed. Remember the bidding process is crucial as it shall determine the sale prices. Patience can pay here as the company can keep bidding to get the highest bid to your advantage. You should also understand the average industry prices lest you suffer losses. If you’re pleased with the price your company is presenting you with after the bid, accept the offer. Otherwise, you can reject the offer and ask your company to continue bidding for a higher offer.

Close the Deal

As soon as you accept the offer, the brokers shall compile a package with all the relevant closing documents. Remember, there are state-specific documents that are required as closing documents. These documents must be provided for the transaction to be completed. Common documents among these are; your life expectancy report, a contract, a competency report that confirms you are eligible to make independent decisions, and verification that confirms your policy is active. Sign the change of ownership and change of beneficiary forms and allow your escrow agent to confirm all the details.

Confirm the Notification

After an escrow agent company confirms all your details,  it will revert your completed change of beneficiary and change of ownership forms to your life insurance company. Your insurance company will then notify you and your newly found buyer when you can actualize the changes. Confirm the notification and wait for your funds to be transferred.

Money Transfer

Your notification will also be sent to the escrow agent company which upon confirmation, shall disburse the sale proceeds. You will then after transferring ownership, receive the money your bidder promised you.


Confirm whether your state accepts rescission to allow you to change your money and restore your insurance. While the time frames for rescission vary from state to state, it is often two weeks after acceptance. In case you change your mind and want to retain your insurance, use the right to rescind and cancel the transaction.

The life settlement transaction process is not as complex as it sounds. Follow these easy steps to facilitate a more accurate and transparent process. Remember to rescind on time lest you will regret it as the settlement is final immediately after the rescission period expires.

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