5 Questions Every Financial Advisor Should Ask Before Referring a Life Settlement

Protecting Your Client — and Your Practice

Life settlements can be a valuable tool for clients with unwanted or unaffordable life insurance policies. But not all settlement providers operate the same way. As a fiduciary, asking these five questions helps you identify the right partner and avoid putting your client — or your reputation — at risk.

1. How Is the Fee Structured?

This is the single most important question. The fee model determines how much of the settlement proceeds your client actually keeps.

What to look for:

Red flag: If the broker can't tell you their exact fee upfront, or if it's expressed as a wide range (10%–30%), your client could lose tens of thousands of dollars.

At Trust Life Settlements, we use a 5-tier flat-fee model. The fee is based on the offer amount and is disclosed before the client signs anything. Maximum fee: $60,000 regardless of policy size.

2. How Many Buyers Will See This Policy?

The number of buyers who evaluate a policy directly impacts the offer price. More competition means higher offers.

What to look for:

Red flag: If a provider gives a single offer without shopping the policy, they may be a direct buyer paying wholesale prices — not a broker working in your client's interest.

Trust Life Settlements submits every qualifying policy to 20+ licensed institutional buyers.

3. What Fiduciary Obligations Does the Broker Have?

In most states, a life settlement broker has a legal obligation to act in the policy owner's best interest. But not all providers are brokers.

What to look for:

Red flag: If the provider is a 'life settlement provider' or 'direct buyer,' they represent the buyer's interest — not your client's. They have no obligation to get the best price.

4. What Happens If My Client Declines All Offers?

Your client should never feel trapped or obligated after starting the process.

What to look for:

Red flag: Exclusivity agreements that lock the client in for 6–12 months, or penalties for declining offers.

At Trust Life Settlements, there is no obligation at any phase. Your client can decline all offers and walk away with zero cost.

5. How Will My Client's Information Be Protected?

Life settlements require sensitive health and financial data. Make sure it's handled properly.

What to look for:

Red flag: Providers who share client information broadly without proper safeguards or consent.

The Bottom Line for Advisors

Referring a life settlement is a powerful way to help clients who are paying for policies they no longer need or can't afford. But the wrong referral partner can cost your client money and damage your professional reputation.

By asking these five questions, you can quickly identify whether a settlement provider operates with the transparency, independence, and client-first approach your practice demands.

Ready to explore a partnership? Trust Life Settlements works with financial advisors nationwide. Call (800) 216-2513 or visit our For Advisors page to learn about our advisor program — including dedicated support, real-time case tracking, and full fee transparency.