Policy Privacy

Maximizing Privacy in Policy Appraisal Before Engaging in a Life Settlement

Data privacy is an essential concern, especially in the financial sector—it’s never been more critical to protect the confidentiality of sensitive information. As they navigate the policy appraisal and life settlement process, life insurance agents should prioritize their professional responsibility to protect their client’s privacy.

In this concise guide, we’ll outline essential steps and considerations for life insurance agents to safeguard their clients’ privacy during life settlement transactions without needing a broker. Brokers are best known for getting your client’s private and protected financial and medical information up front and then sending it out to multiple companies for reviews and hoping for acceptable offers from licensed and unlicensed entities to maximize a client’s payout and their commission.  By the end of this blog post, you’ll be empowered with the knowledge needed to safeguard your client’s privacy.

Understanding the Life Settlement Process

Before discussing how you can best protect client privacy in policy appraisal, we’ll provide a quick overview of the life settlement process. A life settlement involves selling a life insurance policy to a third party for a lump sum (an amount that’s often greater than if the policy were surrendered). Typically, the insured party chooses to sell their policy because they no longer feel they are benefiting from it, or it’s more of a financial burden than a source of financial security and peace of mind.

As part of the life settlement process, the policy’s value is evaluated with a policy appraisal. This appraisal accounts for factors relevant to the policy’s value, including:

  • The health of the insured
  • The insured party’s life expectancy
  • Current market conditions
  • And more

Once the policy has been appraised, it’s time to negotiate with potential buyers. Once that negotiation is complete, the policy is often sold to the highest bidder.

But why is privacy so important when it comes to policy appraisal? Keep reading for our explanation.

The Importance of Privacy in Policy Appraisal

Privacy is a cornerstone of trust in all kinds of financial transactions, and it’s particularly important in the realm of life settlements. This is because policy appraisal requires assessing susceptible information like medical records and financial details.

Not only is maintaining client privacy throughout this process an ethical obligation for life insurance agents, it’s also an essential part of protecting your client’s financial interests, as well as their dignity.

Another benefit of prioritizing privacy in policy appraisal is that it can lead to better offers for the life settlement itself. This is because consistently adhering to privacy standards helps you to build a reputation for discretion. This reputation may attract more competitive buyers for life settlements.

Especially because data breaches and other privacy concerns have risen in recent years, prioritizing privacy in policy appraisal is a prerequisite for successful, ethical life settlement negotiations.

Building Trust with Clients

Trust is foundational to the relationship between life insurance agents and their clients. Here are some of the most effective ways that agents can build that trust:

  • Prioritize transparency: Communicate openly and honestly about every aspect of the life settlement process, including policy details, fees, and any potential risks or downsides.
  • Show expertise: When your clients recognize you as an industry expert, they feel confident in your ability to protect their interests. To maintain your expertise, continually educate yourself on the latest industry trends, regulations, and other new developments.
  • Demonstrate empathy: You build rapport and trust by actively listening and demonstrating empathy when your clients express their hopes and fears.
  • Be consistent: The more consistent you are in your services and follow-up, the more reliable you are in the eyes of your clients.

Incorporating these strategies into your interactions with clients cultivates trust and paves the way for successful relationships—not only during the life settlement process, but potentially for years to come.

Educating Clients About Privacy

Some of your clients may not fully understand how sensitive the information involved in a policy appraisal can be. They may not be aware of the potential risks to their privacy that can arise in the life settlement process. You should strive to educate your clients about the following key aspects of privacy in this area:

  • Data protection: Explain how rigorous data protection measures secure their personal medical and financial information.
  • Confidentiality: Assure your clients that their information will only be shared with those authorized to receive it in order to maintain strict confidentiality.
  • Regulation compliance: Clarify how the life settlement process aligns with industry standards and privacy regulations.

Proactively addressing the most common client concerns and educating them about the way their privacy is protected is the best way to keep clients in the loop and foster trust between the two of you.

Why Policy Appraisals Come Before Applications

The life settlement process should begin with an appraisal, rather than going straight to the application step. We’ll explain why.

Applications require extensive paperwork that asks the policyholder to provide a great deal of personal information, while policy appraisals normally require only a bit of paperwork (typically the policy illustration and a brief medical history).

In addition, the application process is complex and lengthy. It also tends to leave clients and advisors in the dark until offers have been received, which makes it less transparent. By contrast, a policy appraisal typically provides a market value assessment within 24 hours, and is significantly more transparent overall. The sooner they get a policy appraisal, the sooner advisors and clients can make informed decisions about how to move forward.

In the case of a policy appraisal, clients and their advisors are informed of the policy’s value up front, allowing for more effective negotiation. By contrast, as part of the application process, clients may receive offers without knowing their policy’s true value (or the commissions that providers and brokers will receive).  No medical records or financial data is needed or requested up front.  At policyappraisal.com we generate an offer range that is based on a current enforce policy illstration and some short medical questions being answered. Beginning the life settlement process with a policy appraisal can help clients make informed decisions and achieve better results from their settlement. For more info on the difference between an application and a policy appraisal, as well as why a life settlement should start with an appraisal, check out our blog post on the subject.

Privacy-Protecting Procedures Are Essential

As we’ve already emphasized, safeguarding your client’s personal information is an essential part of a successful life settlement. You should consistently adhere to stringent privacy-protecting procedures throughout the entire process.

Luckily, unlike traditional applications, policy appraisal requires only essential information to move forward. This reduces exposure to minimize the risk of data breaches and other violations of clients’ privacy.

Ongoing Privacy Monitoring

Privacy in policy appraisal goes beyond the initial stages of the process. It requires ongoing privacy monitoring to maintain the security of data throughout the entirety of the life settlement. Ideally, you should engage in regular assessments and audits of your data-handling procedures. You should also be using strong encryption measures to act as additional hurdles for anyone seeking to violate your clients’ privacy. Working with life settlement providers who are professionally certified and have earned a reputation for trustworthiness also helps to protect your clients’ personal information.


By following our guidelines and opting for a policy appraisal before submitting a settlement application, agents can protect their client’s personal information and maintain confidentiality throughout the life settlement journey.

If you want to pursue a policy appraisal, consider working with us. Our proprietary appraisal process blends industry pricing methodologies with over three decades of experience. We identify the secondary market value of existing life insurance policies quickly and efficiently. Call us today for a policy appraisal to learn the actual value of your client’s life insurance policy –free.

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