Cash Flow Notes: Making a Living with Life Settlements

New and experienced brokers alike are always interested in the hottest current trends in cash flow notes. Everyone wants to know what everyone else is doing (because no one wants to miss anything!).

Over the past few years, we have been inundated with Life Settlement requests. Fortunately for us, I find them very interesting and fun to work: I say fortunately, because the commissions are excellent. I have also discovered that many of the players you’d think would be familiar with Life Settlement opportunities are fairly uneducated about them. This creates delicious opportunities for you.

Let me give you a brief overview of Life Settlement options and how they work.

A Life Settlement is the sale of an active life insurance policy by the insured. For many a policyholder, selling his policy makes total sense. Here are some of the reasons:

  • The policy has become too expensive to maintain.
  • Allowing his policy to lapse provides little or no benefit.
  • Settlement amount is always greater than the cash surrender value in a policy.
  • Perhaps her day-to-day expenses are not easily met.
  • A decline in his health has increased his medical expenses.
  • Her health and long-term care have become a financial problem.
  • He is afraid of leaving his family burdened with debt.
  • New tax laws or estate changes have made her current life insurance coverage excessive.
  • The policyholder is living in an assisted care facility and has exhausted his ability to pay for his residential care.
  • Perhaps he needs alternative funding for more suitable financial products.

Maybe his family is grown and he doesn’t need the amount of coverage he once needed to ensure their security.

By selling his policy, your client eliminates the expense of premium payments, is better able to pay day-to-day expenses, preserves his high quality of life, enjoys increased financial liquidity in mercurial economic times, and maintains control over his own affairs before passing. This is tremendous peace of mind for many of our seniors.

The institutional investors who purchase the policies then take over paying the premiums, and they become the beneficiary of the policy upon the death of the insured. Naturally, the policies are sold at a discount, but still at a greater amount than the “surrender” value offered by the insurance companies.

Consider this statistic…

approximately 88 per cent (I’ve heard as high as 93 per cent) of life insurance policies never result in a death claim: they are allowed to lapse or are surrendered.

Consider, also, this statistic…

currently, the senior market is estimated to have over $500 billion of in-force life insurance policies.

Remember, with the “graying of America,” the senior market is burgeoning and formidable.

For many years, the insurance companies were essentially the only market for this commodity in which an individual has probably been investing for years. The advent of a secondary market has now created a free market for policy owners to value their insurance just as they do other financial assets.

Ideal candidates for selling Life Insurance policies are:

  • over 65 years of age,
  • with a life insurance policy of at least $250,000 (smaller policies can also be marketed), and
  • a life expectancy of 15 years or less.

As a cash flow note broker, you do not need to question the insured regarding his health. The professionals will evaluate his medical status as part of their due diligence.

You can download the simple forms for Life Settlements from our website then email or fax them to our office at the contact information below.

You can learn more about the process, finding clients and marketing in our book, Life Settlements: Vast Wealth Opportunities with a Timely Income Stream, available on this website.

Commissions…(you did want to know about those, didn’t you???)…are excellent. Maximum commission is about 10 per cent of the face value of the policy, OR one third of what is funded…whichever is less. Naturally, as with any other debt instrument, you can negotiate your fee to make a deal work rather than lose the deal.

As a cash flow broker working with Life Settlement, it is important that you:

• Do not quote rates.

• Be financially realistic when speaking with your client. This will come with experience, but, basically, the shorter the life expectancy (“LE”), the higher the likely offers.

• Let your client know that it will take 30-60 days to get back all the offers and go through a few rounds of negotiations with all bidders. The speed with which the doctors get us their medical reports also affects the length of the process.

• Make sure your client is not just “shopping” his policy around—the funders spend a great deal of time and effort analyzing and underwriting each policy, not to mention obtaining medical reports, etc. If you burn them a few times, they are not likely to make much of an effort when you bring them future clients.

As you become a trusted cash flow advisor, I think you will find adding Life Settlements to your arsenal will be interesting and very lucrative. You should find everything you need to broker these valuable debt instruments in our Life Settlements book: we outline the process and offer application forms and sample marketing letters. Good hunting!

About the Author: Marilyn and Larry Singer, DCFS, CMA are Master Consultants and members of The Million Dollar Club. Marilyn has over 35 years marketing experience and received Granite TV’s Salesperson of the year; WB Network Most Tenacious Salesperson of the Year; and Sinclair Broadcasting’s $2 Million Sales Award. She is a certified image consultant and teaches Presentation Skills and real estate investment nationally.

Larry is an American Cash flow Association visiting instructor, lecturer, and 2004 ACFC Instructor of the Year. He is also an instructor for Fred Pryor Seminar Group. With over 34 years in advertising and marketing, Larry is also is an adjunct professor at the University of Buffalo in its Communication department. Larry and Marilyn own Capital Funding Group division of Capital Asset Funding Inc., Buffalo New York. Phone 716/570-8926, Fax 716/833-3865, e-mail or, and online at

They currently have two book in Note Investor bookstore: the 3rd Edition of Brokering Delinquent Debt for Fun and Profit and Life Settlements: Vast Wealth Opportunities with a Timely Income Stream. They have just released their first general audience book, Get Out of Your Way—Success is Right Behind You, a motivational book, for sale on Amazon as well as in national bookstores.



  1. Allen Robinson says

    Life settlements looks like a good way to make money and help people. I’m in an area that has many assisted living facilities. And possibly many of the people in those places have polisies that could be sold. Would you market to insurance writers as well as policy holders?

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