The life insurance industry has a poor reputation. However, the industry could be a lot better. Many policyholders aren't aware of their options. To get more people to know about the process, there's a need to increase transparency. And the industry could benefit from a greater degree of collaboration.
As a result, there's a need for life settlement industry players to work together to promote more transparency. One way to achieve this is through the Harbor Life Brokerage Exchange. This program is designed to help policyholders receive more value when they sell their policies. It allows brokers and agents to upload their life insurance policy and show it to a network of buyers. By doing this, the brokerage firm will collect 30% of the commissions and save its clients time and money.
While the life settlement industry has been around for years, it has not been a household name. That is changing, thanks to individual marketing campaigns that are being led by industry players. More and more policyholders are beginning to recognize that they can sell their life insurance for top dollar. If the industry can make this more widespread, it will benefit both policyholders and a broader financial services industry.
Increasing transparency in the life settlement market is a necessary step towards achieving mass adoption. However, the industry needs more competition. In order to achieve this, the life settlement industry should focus on creating industry standards that help it provide more value to all parties involved. Ideally, firms should self-regulate so that they can give their clients the best possible results.
Another important consideration is the fact that life settlements have been subject to fraud and misconduct. The industry has been hampered by a lack of industry standards and regulations. In many states, the life settlement industry is heavily regulated. There are also eight states that have mandatory disclosure laws. These laws ensure that consumers are aware of the benefits of a life settlement.
Another key area of concern is the role that brokers play in the life settlement process. For example, many brokers tell clients that they should surrender their life insurance for less than its market value. But the truth is that the policyholder has very little chance of recouping the cumulative amount they invested in premiums. When an advisor tries to persuade a client to surrender the policy, they are not necessarily looking out for the customer's best interest.
Some broker-dealers, such as Wells Fargo and Morgan Stanley, do not allow their financial advisors to participate in life settlements. Other firms, such as AIG and Coventry, have faced allegations of overcharging on life settlements. Similarly, the life settlement industry has been the subject of a $160 million lawsuit that was settled by AIG and Coventry.
Broker-dealers are often under FINRA's scrutiny. They must adhere to fiduciary guidelines and report information to regulators. Additionally, some insurance carriers do not allow their brokers to pursue life settlements. Because of these restrictions, a life settlement is not always presented to a policyholder when it would be most advantageous.