A life insurance agent (otherwise known as a life insurance producer) may sometimes act as a life settlement agent (otherwise known as a life settlement producer) under the direction of a life settlement broker. In some states, life agents are pre-qualified to act as settlement brokers because a life insurance license is the only broker requirement in those states. It is critical that consumers to determine if their life insurance agent is acting as a life settlement broker or acting as a life settlement agent / life settlement producer under a broker.
Because life insurance agents are believed to have a responsibility to consider a life settlement for their clients, many also function as a life settlement agent / life settlement producer in order to help facilitate settlement transactions and share in commissions and fees. When they function as a life settlement agent / life settlement producer they act under the direction of a life settlement broker. Even though the life settlement agent / life settlement producer may be a policy owners only contact person, it is extremely important for policy owners to look to the written life settlement broker agreement to understand the duties, responsibilities, and compensation structures that will ultimately govern the transaction, regardless of what are told by the life settlement agent / life settlement producer.
When life agents act as life settlement brokers, they fall under the same guidelines as life settlement brokers.
Under no circumstances is it advisable for a policy owner to execute a life settlement transaction without first having a life settlement broker agreement in place.