Who is referred to as a life settlement broker?

A life settlement broker is specifically defined as an individual who facilitates the negotiation of life settlement contracts on behalf of policyholders for a fee or commission. Essentially, their role involves helping policyholders who want to sell their life insurance policies to third parties, usually for an amount greater than the cash surrender value but less than the death benefit. This is a specialized area within the insurance industry that focuses on the secondary market for life insurance.

The broker acts as an intermediary, connecting policyholders with potential buyers and ensuring that all terms of the settlement are understood and agreed upon by both parties. Their expertise includes navigating the complexities of life settlement transactions and ensuring that clients receive the best possible offers based on the policyholder's age, health status, and the specifics of the insurance policy itself. This role is critical in maintaining compliance with state laws and ensuring that the process is conducted fairly.

In contrast, individuals who underwrite life insurance policies assess risk to determine premiums, while those providing health insurance advice focus on health coverage and related policies. Selling insurance directly to consumers involves a different function, primarily focusing on the distribution of insurance products rather than facilitating the sale of existing policies. Thus, the unique role of a life settlement broker is accurately captured by the definition provided in the correct