Trust Life Settlements rolls out flat-fee life settlement broker model

Trust Life Settlements, LLC is introducing a published flat-fee compensation structure for life settlement brokerage, aiming to separate broker pay from the size of the policyowner’s offer. The company says the model is meant to make it easier for policyowners to compare gross offers with what they actually keep after fees and costs.

Why it matters: - Life settlement policyowners can lose a meaningful share of a gross offer to broker compensation and transaction costs. - Trust Life Settlements is pushing a flat-fee model that focuses attention on estimated net proceeds, not just the headline offer. - The company says the approach is designed to improve transparency when policyowners evaluate whether selling an existing life insurance policy makes sense.

What happened: - Trust Life Settlements, LLC introduced a published five-tier Flat-Fee structure for life settlement brokerage. - The model is based on the settlement offer or proceeds, not the policy’s face value or death benefit. - The company markets qualifying policies to institutional buyers and seeks competitive offers for policyowners in the secondary market. - Trust Life Settlements is licensed in Florida and serves clients nationwide, working with appropriately licensed brokers or other licensed parties where required.

The details: - A life settlement broker represents a policyowner seeking to sell an existing life insurance policy. - A broker can collect policy and medical information, obtain life expectancy underwriting, solicit bids from institutional buyers, communicate offers, negotiate terms and coordinate closing. - In Florida, a broker owes a fiduciary duty to the policyowner to act according to the policyowner’s instructions and best interest. - Trust Life Settlements works with multiple institutional buyers because different buyers can value the same policy differently based on life expectancy assumptions, future premium requirements, underwriting methods, portfolio objectives and target returns. - The company’s published pricing says a $500,000 settlement falls within its $30,000 Flat-Fee tier. - In the company’s hypothetical comparison, a 15% broker fee would leave $425,000, a 20% fee would leave $400,000 and a 30% fee would leave $350,000. - Under Trust Life Settlements’ flat-fee example, the same $500,000 offer would leave $470,000 after the $30,000 fee. - The company describes the comparison as a “Net Settlement Test”: Gross Settlement Offer minus Broker Compensation minus Applicable Transaction Costs equals Estimated Net Proceeds. - Trust Life Settlements offers a Life Settlement Calculator for a preliminary estimate before an individualized evaluation. - Calculator results are educational estimates and are not offers or guarantees. - Policyowners are urged to ask who represents them, whether the policy was marketed competitively, what the gross offer is, how the broker is compensated, what the estimated net proceeds are and whether the brokerage agreement is exclusive and for how long.

Between the lines: - The flat-fee structure is a direct challenge to percentage-based compensation, which can rise as the settlement offer rises. - The emphasis on net proceeds suggests Trust Life Settlements wants policyowners to compare brokers on take-home value, not just on the size of the initial bid. - The company’s framing also reinforces the difference between a broker, who represents the policyowner, and a provider, who is on the purchasing side of the transaction. - Trust Life Settlements said the same policy can attract different offers because institutional buyers use different underwriting and investment assumptions.

What's next: - Policyowners considering a life settlement will likely be expected to evaluate both the offer and the fee structure before signing. - Trust Life Settlements is positioning its calculator, buyer network and flat-fee pricing as tools for that decision. - The company’s model could pressure other brokers to explain more clearly how compensation affects net proceeds.

The bottom line: - Trust Life Settlements is betting that life settlement sellers care less about the biggest gross offer and more about the amount left after fees, costs and negotiation.