How to Build a Life Settlement Review Process

Retirement-focused financial advisors, RIAs, CPAs, and insurance professionals routinely encounter clients holding life insurance policies that no longer serve their original purpose. Estate plans change, businesses are sold, spouses pass, and premiums become a burden on fixed income.

Yet without a structured review process, these opportunities are missed entirely. The policy gets surrendered for a fraction of its potential value, allowed to lapse, or continues draining retirement assets through unnecessary premiums. The Life Insurance Settlement Association (LISA) promotes awareness that a secondary market exists for in-force policies, yet many policyholders and advisors never learn of it. Key terms are defined in the life settlement glossary.

Building a systematic life settlement review into your practice addresses this gap — and creates measurable value for clients who are already in your book.

This framework applies to any professional who interacts with retirement-age clients holding life insurance:

• Financial Advisors and RIAs — conducting annual or semi-annual portfolio reviews where insurance is part of the balance sheet.
• Insurance Professionals — servicing policies, handling lapses, or processing 1035 exchanges where a settlement should be considered.
• CPAs and Tax Professionals — reviewing clients' assets during tax planning and spotting policies with high cost basis or premium burden. See our 1099-LS tax guide for settlement-specific tax considerations.
• Estate Attorneys — administering trusts (ILITs) where continued premium funding may not serve the beneficiaries' best interests.

Embed this five-step process into your existing client review workflow. It adds minimal time but ensures no settlement-eligible policy slips through unexamined.

1. 1
   Flag during intake or annual review: Add three screening questions to your standard review checklist: (1) Does the client own any life insurance policies with face values over $250,000? (2) Is the insured age 65 or older? (3) Has there been any change in health, estate plan, or premium affordability since the last review? If any answer is yes, the policy warrants further evaluation.
2. 2
   Gather policy data: Request the current in-force illustration from the carrier. This reveals projected premium requirements, cash surrender value, and policy sustainability. Our guide on reading in-force illustrations covers exactly what to look for.
3. 3
   Run an eligibility screen: Use the basic eligibility criteria to determine if the policy is likely to qualify: $250K+ face value, insured age 65+, universal/whole/convertible term policy type, and any health change since issue. Our free Estimate Calculator can provide a preliminary estimate in minutes.
4. 4
   Introduce the concept to the client: Frame it as one of several options — alongside keeping the policy, reducing the face amount, or surrendering. The comparison of surrender value vs. potential settlement value is typically the most powerful data point in the conversation.
5. 5
   Engage a licensed broker for formal evaluation: If the preliminary screen suggests the policy may qualify, engage a licensed life settlement broker to run a competitive bid process. This step requires no upfront cost and creates no obligation for the client. Qualified submissions may receive a preliminary valuation within approximately 24 hours after sufficient initial information has been received.

For a deeper dive on in-force illustrations, see our in-force illustration guide.

The goal is to make life settlement screening automatic — not an afterthought. Here's where it fits in common practice models:

The key principle: any time a client is considering surrendering, lapsing, or significantly restructuring a life insurance policy, a settlement evaluation should happen first. The evaluation costs the client nothing, and the difference in value can be meaningful. A life settlement may produce more than the policy's cash surrender value, but results vary by case. A free evaluation shows whether a policy may have secondary-market value.

Many advisors hesitate to raise the topic because they're unfamiliar with the process or worried about client perception. Here's a proven framework:

• Lead with the problem: "Your premiums have increased 40% over the past three years. Let's look at all your options for this policy."
• Present all alternatives equally: "You can keep paying, reduce the face amount, surrender to the carrier for their stated value, or explore what the secondary market would pay."
• Use the numbers: "The carrier's surrender value is $45,000. Based on your policy's characteristics, the secondary market may or may not offer more. Would you like us to find out — at no cost?"
• Emphasize no obligation: "Getting a market evaluation doesn't commit you to anything. It simply gives us another data point for making the best decision."

For more on structuring client conversations, see our advisor communication guide.

A structured review process actually strengthens your compliance posture rather than creating risk:

• Documenting that you evaluated a life settlement option demonstrates fiduciary diligence — especially for ILIT trustees and RIAs with a best-interest obligation.
• All transactions go through state-regulated licensed brokers and providers with mandatory consumer protections.
• Client medical records are handled under strict HIPAA-compliant protocols by the settlement broker — you never handle PHI directly.
• Settlement offers are non-binding until the client formally accepts. There's no risk to the client from simply receiving a market evaluation.
• Broker compensation is determined case by case, considering the circumstances and economics of each transaction, and is always disclosed before the transaction is finalized. Compensation is structured to support successful transactions while staying transparent with the appropriate parties. Applicable compensation and transaction costs are disclosed in accordance with governing state laws and transaction documentation. See our life settlement broker vs provider guide for details on how intermediary compensation works.

Not every policy qualifies, and setting realistic expectations upfront avoids wasted time. Strong candidates typically share these characteristics:

Use our free Life Settlement Calculator to get a preliminary estimate, or check the full eligibility criteria.

Advisors who integrate life settlement reviews often point to benefits such as:

• Identifying settlement-eligible policies that would otherwise have been lapsed or surrendered
• A documented, defensible process for evaluating all options before a policy is surrendered
• Stronger client relationships from surfacing value they didn't know existed
• Differentiation from competing advisors who overlook this asset class entirely
• Disclosed referral arrangements where permitted — see the compensation note above

A life settlement may produce more than the policy's cash surrender value, but results vary by case. A free evaluation shows whether a policy may have secondary-market value. See how this works in practice with our retirement review case study.

1. 1
   Add the three screening questions to your review checklist: Policy face value > $250K? Insured age 65+? Any change in health, plan, or affordability? If yes to any, flag for evaluation.
2. 2
   Identify 5 clients in your current book who fit the profile: Start with clients who have mentioned premium burden, are considering lapsing, or have policies tied to completed business or estate objectives.
3. 3
   Partner with a licensed life settlement broker: Choose a broker who provides prompt preliminary estimates, runs competitive bidding processes, and keeps you involved. Policyowners may also contact us directly; where they work with you, we coordinate with you.
4. 4
   Track results and refine: Document cases evaluated, conversion rate, and value recovered. Use this data to refine your screening criteria and demonstrate ROI to clients.

Ready to get started? Contact Accelerated Life Solutions to discuss how we support advisor practices as a life settlement broker, or send clients to our life insurance policy review page. Your client stays your client — always.