He says some policies have features such as accelerated death benefits that can help customers overcome short-term financial troubles. Understanding their options may allow them to keep the policy and mitigate the need to sell it. Some companies discourage agents from assisting with life settlements. Tom Towers, a Northwestern Mutual Life spokesperson, says the company's agents are prohibited from receiving any financial benefits for helping to broker a life settlement deal for any of the company's clients. It's important for them not to make a poor decision when they are presented with an opportunity like this.
Some companies discourage agents from assisting with life settlements.
Since it is a fairly new industry, the life settlement business is not heavily regulated. Currently, Texas is the only state with proposed legislation to regulate life settlements the same way as viaticals are regulated. This is when an investment company induces an older person to buy a life policy. The policyholder then turns around and sells it to the company within only days or weeks. Beth Hill, director of the Life, Annuity, and Credit section in the Texas Department of Insurance, notes that anyone who helps a company commit insurance fraud in this manner is subject to penalties by law.