Our Privacy Policy

Effective Date: September 6, 2022

Harbor Life Brokerage LLC (“HarborLife,” “us,” or “we”) appreciate your visit to our website. Because your privacy is important to us, we want you to understand our practices with respect to collecting and using your personal information online.  We have established this website privacy policy (the “Privacy Policy”) to explain how HarborLife uses, discloses, protects and manages the personal information that HarborLife collects from you (the customer) online.

  1. Scope, Consent for Collection, Use and Disclosure

This Privacy Policy governs your use of the harborlifebrokerage.com website (the “Website” or the “Site”), and also applies to your use of interactive features, widgets, applications, content or downloads that we make available through the Website and that post this Privacy Policy (collectively referred to herein as the “Services”), regardless of how you access or use the Services, whether via personal computers, mobile devices or otherwise, but does not apply to data we receive from third parties [unless we combine such data with Personal Information (defined below) that we have ourselves collected under this Privacy Policy.] 

This Privacy Policy does not apply to our data collection offline or otherwise outside of our Services (unless otherwise stated below).  Out statements under this Privacy Policy cover only information collected through the Services directly by us, and not by third parties that may interact with our Services or link to this Website.

To the extent we provide you notice on this Site of different or additional privacy policies or practices (e.g., at the point of our collection), those additional terms shall govern such data collection and use. 

By using the Services and/or by submitting inquiries through the Services, you explicitly agree to the terms and conditions of the Privacy Policy in effect at the time of your use.

We may add to, update, delete from or modify our Privacy Policy at any time in our sole discretion.  We reserve the right, at any time and in our sole discretion, to change the Privacy Policy.  We may post or display notices of changes to the Privacy Policy on this Site.  Once posted, these changes to the Privacy Policy become effective immediately.  

If any change that we make is not acceptable to you, promptly stop using our Services.  If you continue to use our Services, doing so is your agreement to be bound by those changes.  You should check back regularly and review this Privacy Policy so that you are aware of the most current rights and obligations which apply to your agreement with us.  Nothing in this Privacy Policy shall be deemed to confer any third-party rights or benefits to you.

2. What Kind of Information Do We Collect?

2.1 Information you Provide to Us.

We do not collect “Personal Information” about you through the Services unless you choose to provide it to us voluntarily, such as through the “Contact Us” page or through submitting a life insurance policy settlement inquiry through our “Inquire Now” page.  We define Personal Information as information that is unique to you and might include your phone number, name, address, email address, Social Security Number, life insurance policy number, face amount, issue date, premium payment history, and name of your life insurance company and certain medical or health information.  

We may also collect demographic information, such as information about your gender, age, marital status and education level (“Demographic Information”) when you submit an inquiry through our “Inquire Now” page.  

If you encounter a screen or page that requests information you do not want to share with us, do not enter the information and do not proceed with that screen or page. 

If you do provide us with Personal Information, we will use it for the purpose of responding to ‎your inquiry, and we will not sell, license, transmit or disclose this information to third parties unless: ‎‎(1) you expressly authorize us to do so, (2) it is necessary to allow our ‎contractors or agents to ‎provide services for us, (3) in order to provide our products or services to ‎you, (4) it is disclosed to ‎entities that perform marketing services on our behalf or to other entities ‎with whom we have joint ‎marketing agreements, (5) it is disclosed to ‎licensed life settlement providers that may have an interest in purchasing your life insurance policy in a life settlement transaction and/or investors that may have an interest in purchasing your life insurance policy from a licensed life settlement provider, or (6) otherwise as we are required or permitted ‎by applicable law.  We may also use the ‎information you choose to provide to us to improve the content of this Site and our Services or to ‎contact you for marketing purposes.‎

2.2 Information Others Provide to Us About You

We may, from time to time, supplement the information we collect ‎directly from you on our Services with outside records from third parties for various ‎purposes, including to enhance our ability to serve you, to tailor our content to you, ‎and to offer you opportunities that may be of interest to you.  To the extent we ‎combine information we receive from those sources with your Personal Information ‎we collect on the Service, it will be treated as Personal Information and we will apply ‎this Privacy Policy to such combined information, unless we have disclosed ‎otherwise.

2.3 Information We Collect When you Use our Services

In addition to any Personal Information or other information that you choose to submit to us (as described above) we and our third-party service providers may use a variety of technologies that store or collect certain information whenever you visit or interact with the Services (“Usage Information”).  This Usage Information may be stored or accessed using a variety of technologies that may be downloaded to your personal computer, browser, laptop, tablet, mobile phone or other device (a “Device”) whenever you visit or interact with our Services.  [To the extent we associate Usage Information with your Personal Information we collect directly from you on the Services, we will treat your Usage Information as your Personal Information.]  

Usage Information may include: 

  • your IP address, UDID or other unique identifier (“Device Identifier”). A Device Identifier is a number that is automatically assigned to your Device used to access the Services, and our computers identify your Device by its Device Identifier;
  • your Device functionality (including browser, operating system, hardware, mobile network information);
  • the URL that referred you to our Services;
  • the areas within our Services that you visit and your activities there, including remembering you and your preferences;
  • your Device location;
  • your Device characteristics; and
  • certain other Device data, including the time of day, among other information.

2.3 Information Collected Through Tracking Technologies

A. Types of Tracking Technologies we Use

We may use a variety of tracking technologies to automatically collect Usage Information [and Demographic Information], including, but not limited to, cookies, web beacons, embedded scripts, browser fingerprinting, GPS, iBeacons, and ETags (collectively “Tracking Technologies”).  A cookie (or “locally shared object”) is a data file placed on your device when you visit our site.  

Your browser, or other software (including Adobe Flash), may allow you to reject or remove cookies, but if you do so, some features of our Services may not work properly, and we may not be able to remember your preferences the next time that you visit.  We also use web server logs to collect and store information about usage of our Services.  When you use the Services from a mobile device, like a smartphone, we may also collect additional information from your device, including your location, Device Identifier, and information about your mobile network.   

B. Purpose of Tracking Technologies

We may use Tracking Technologies for a variety of purposes, including:

i. When Strictly Necessary to Provide the Services 

We may use Tracking Technologies that we consider strictly necessary to allow you to use and access the Services, including Cookies required to prevent fraudulent activity and improve security. 

ii. To Assess Performance

We may use Tracking Technologies that are useful in order to assess the performance of the Services, including as part of our analytic practices or otherwise to improve the content or services offered through the Services. 

iii. To Improve Functionality

We may use Tracking Technologies to offer you enhanced functionality when accessing the Services, including identifying you when you visit this Site or keeping track of your specified preferences, including in terms of the presentation of content on this Site.

iv. To Deliver Relevant Content

We may use Tracking Technologies to deliver content relevant to your interests on the Services and third-party sites based on how you interact with the Services.  This includes using Tracking Technologies to understand the usefulness to you of the content that has been delivered to you.] 

C. Tracking Technologies Choices and Consent

We obtain your consent to our collection of Usage Information [and Demographic Information] through using Tracking Technologies by providing you with transparent information in this Privacy Policy and providing you with the opportunity to make a choice to disable Cookies as set forth above.  Please note that we are not required to obtain your consent to our use of Tracking Technologies identified above that are strictly necessary.

We are giving you detailed notice of the Tracking Technologies and your limited choices regarding them so that your consent is meaningfully informed.

D. Third Party Tracking

There may be other Tracking Technologies now and later devised and used by us in connection with the Services.  Further, third parties may use Tracking Technologies in connection with the Services, which may include the collection of information about your online activities over time and across third-party web sites or online services.  We may not control those Tracking Technologies and we are not responsible for them.  However, you consent to potentially encountering third-party Tracking Technologies in connection with use of the Services and accept that our statements under this Privacy Policy do not apply to the Tracking Technologies or practices of such third parties.  

E. Do Not Track

Some Internet browsers may be configured to send “Do Not Track” signals to the online services that you visit.  California Business & Professions Code Section 22575(b) provides that California residents are entitled to know how HarborLife responds to “Do Not Track” browser settings. 

There currently is no consensus among industry participants as to what “Do Not Track” means in this context.  Therefore, like many websites and online services, our Services do not alter their practices when they receive a “Do Not Track” signal from a visitor’s browser.  To find out more about “Do Not Track,” please visit http://www.allaboutdnt.com.

F. Disabling Tracking Features 

Regular Cookies may generally be disabled or removed by tools that are available as part of most commercial browsers, and in some but not all instances can be blocked by selecting certain settings.  [We use tracking and advertising products provided by Google.  You may learn more about Google’s use of Cookies by visiting the Google advertising opt-out page.]

Each browser you use will need to be set separately and different browsers offer different functionality and options in this regard.  Also, these tools may not be effective with regard to Flash cookies or HTML5 cookies or other Tracking Technologies.  For information on disabling Flash cookies go to Adobe’s website www.adobe.com.

Please be aware that if you disable or remove these technologies some parts of our Services may not work and that when you revisit this Site your ability to limit browser-based Tracking Technologies is subject to your browser settings and limitations. 

3. How Do We Use the Information Collected? 

We may use your Personal Information, Demographic Information, and/or Usage Information that we collect about you subject to this Privacy Policy for the following purposes: 

  • to provide you with information or services that you have requested or agreed to receive or to provide you with marketing information or services on behalf of us or third parties;
  • ‎to licensed life settlement providers that may have an interest in purchasing your life insurance policy in a life settlement transaction;
  • to investors that may have an interest in purchasing your life insurance policy from a licensed life settlement provider;
  • to respond to a legitimate claim, judicial process, or request from law enforcement agency as permitted or required by law;
  • to enable you to participate in a variety of the Services’ features;
  • to process an inquiry submitted through the Services, including verifying your information is accurate and valid;
  • to improve our Services or their functionality, or to customize your experience on the Services[, or to serve you specific content that is relevant to you;]
  • to contact you with regard to your use of the Services and, in our discretion, changes to the Services and/or Services’ policies;
  • for internal business purposes; and
  • for purposes disclosed at the time you provide your information to us or as otherwise set forth in this Privacy Policy.

3.1 To Develop Services, Provide Support, and Improve Security 

We may use your Personal Information, Demographic Information, and/or Usage Information, to conduct research and further develop our Services.  In some cases, we may work with trusted third parties to perform research.  

We may use Personal Information, Demographic Information, and/or Usage Information (which can include your communications to us) to investigate, respond to and resolve complaints and security issues.  We may use such information to investigate violations of [our Terms of Use or] this Privacy Policy.

3.2 To Promote Communications

We may use your Personal Information to facilitate communication with you through, for example, email or mobile phone.  We may send you messages about the availability of our Services, security, or other service-related issues.  We may also send messages about how to use the Services, network updates, reminders, promotional messages, or to communicate with you regarding life settlement offers.  While you may change your communication preferences [at any time,] please be aware that you cannot opt-out of receiving service messages from us, such as security and legal notices.

3.3 To Provide Advertising and Location-Based Services

We may also use your Personal Information, Demographic Information or Usage Information that we collect about you: (1) to specifically target relevant advertisements or content to you based on how you interact with our Services; (2) to understand the usefulness to you of the advertisements or content that have been delivered to you; and (3) to increase this Site’s functionality, including allowing you to comment or add content to the Services.

4. Sharing of Information with Third Parties

We may share non-Personal Information, such as aggregated user statistics, with third parties.  We may share your Device Identifiers with third parties along with data related to you and your activities.  [We do not share your Personal Information that you have provided, through using our “Contact Us” page with third parties for those third parties’ direct marketing purposes.  We may share your Personal Information that you have provided through our “Inquire Now” page with third parties for those third parties’ direct marketing purposes.]  

If we de-identify data about you, it is not treated as Personal Information by us, and we may share it with others freely.  In addition, we may share the information we have collected about you, including Personal Information, as disclosed at the time you provide your information and as described below or otherwise in this Privacy Policy.  

We may also share information with third parties as described below.  

4.1 When You Request Information From or Provide Information to Third Parties‎

You may be presented with an option through our Services to receive certain information from third ‎parties, or to have us send certain information to third parties or ‎give them access to it.  ‎

If you choose to do so, we may disclose your Personal Information and other information to such ‎third parties and all information you disclose will be subject to the third-party’s privacy policies and ‎practices.  ‎

In addition, third parties may store, collect or otherwise have access to your information when you ‎interact with their Tracking Technologies, content, tools, apps, or ads on our Services.  ‎By using those third-party tools, you acknowledge that you are ‎subject to those third-parties’ practices and policies regarding Tracking Technology.  ‎

We are not responsible for the privacy policies and practices of third parties and, therefore, you ‎should review any third-party privacy policies and practices prior to requesting information from ‎them or otherwise interacting with them.  ‎

4.2 When Third Parties Provide Services on Our Behalf  

We may use third-party vendors to perform certain services on our behalf, such as hosting this Site, designing and/or operating the Services’ features, tracking the Services’ activities and analytics, and other administrative services.  

We may provide these vendors with access to your information to carry out the services they are performing for you or for us.  Third-party analytics and other service providers may set and access their own Tracking Technologies on your Device and they may otherwise collect or have access to information about you, potentially including your Personal Information.  We are not responsible for those third-party technologies or activities arising out of them.  We are not responsible for the effectiveness of or compliance with any third-parties’ opt-out options.   

4.3 To Protect the Rights of HarborLife and Others  

To the fullest extent permitted by applicable law, we may also disclose your information if we believe in good faith that doing so is necessary or appropriate: 

(i) To protect or defend the rights, safety or property of HarborLife or third parties (including through the enforcement of this Policy, our Terms of Use, and other applicable agreements and policies); or 

(ii) To comply with legal and regulatory obligations (e.g., pursuant to law enforcement inquiries, subpoenas or court orders).  

To the fullest extent permitted by applicable law, we have complete discretion in electing to make or not make such disclosures, and to contest or not contest requests for such disclosures, without notice to you.  

4.4 In the Event of a Business Transfer  

We reserve the right to disclose and transfer all such information: 

(i) To a subsequent owner, co-owner or operator of this Site or applicable database; or 

(ii) In connection with a merger, consolidation, restructuring, the sale of substantially all of our interests and/or assets or other corporate change, including, during the course of any due diligence process.  

Any other entity which buys us or part of our business will have the right to continue to use your data, but only in the manner set out in this Privacy Policy unless you agree otherwise.

4.5 Your California Privacy Rights

Under California law, California residents who have an established business relationship with us or one of our Affiliates may choose to opt out of HarborLife’s disclosure of personal information about them to third parties for direct marketing purposes.  Unless noted at the time of collection, our policy is not to disclose personal information collected online to a third party for direct marketing purposes without your approval. If you choose to opt-out at any time after granting approval, write ton info@harborlifebrokerage.com

5. Third-Party Content and Links to Third-Party Sites

The Services may contain content that is supplied by third parties, and such third parties may collect Usage Information, Demographic Information, and your Device Identifier when you use the Services.  In addition, when you use the Services, you may be directed to other services that are operated and controlled by third parties that we do not control.  

We are not responsible for the data collection and privacy practices employed by any of these third parties or their services and they may be tracking you across multiple sites and may be sharing the results of that tracking with us and/or others.  

For example, if you “click” on a link, the “click” may take you off this Site onto a different site.  These other sites may associate their Tracking Technologies with you, independently collect data about you, including Personal Information, and may or may not have their own published privacy policies. 

Third-party applications may also be available via the Services.  The owners of these applications (“Third-Party Owners”) may collect Personal Information, Demographic Information, Usage Information, and/or other data from you and may have their own policies and practices.  We are not responsible for how Third-Party Owners or their applications collect or use your information and they may be tracking you across multiple sites and may be sharing the results of that tracking with us and/or others.  

These Third-Party Owners may have their own terms of service, privacy policies or other policies and ask you to agree to the same.  We are not responsible for these third-party privacy policies or the practices of Third-Party Owners.  Be sure to review any available policies before submitting any personally identifiable information to a third-party application or otherwise interacting with it and exercise caution in connection with these applications.  

We also encourage you to note when you leave this Site and to review the third-party privacy policies of all third-party locations and exercise caution in connection with them.  

6. Our Participation in Advertising Networks

The Services may, at our discretion, use third parties such as network advertisers and ad exchanges, to serve advertisements on the Services and may use third-party analytics and other service providers to evaluate and provide us and/or third parties with information about the use of the Services and viewing of ads and of our content.  Network advertisers are third parties that display advertisements, which may be based on your visits to the Services and other apps and sites you have visited.  Third-party ad serving enables us to target advertisements to you for products and services in which you might be interested.  

6.2 Network Advertisers May use their Own Tracking Technologies

The Service’s third-party ad network and exchange providers, the advertisers, the sponsors and/or traffic measurement services may themselves set and access their own cookies (including Flash cookies), web beacons and other Tracking Technologies on your Device and track certain behavioral Usage Information regarding users of your Device via a Device Identifier.  

These third-party Tracking Technologies may be set, among other things: 

(i) To help deliver advertisements to you that you might be interested in; 

(ii) To prevent you from seeing the same advertisements too many times; and 

(iii) To understand the usefulness to you of the advertisements that have been delivered to you.  

You acknowledge and agree that associated technology may access and use your Device and may set or change settings on your Device in connection with the associated operations.  Note that any images (or any other parts of content) provided by third parties in association with third-party ads or other content may serve as web beacons, which enable third parties to carry out the previously-described activities. 

6.3 HarborLife is not Responsible for Third-Party Tracking

Third-party Tracking Technologies used by network advertisers are not controlled by us.  Statements regarding our practices do not apply to the methods for collecting information used by these third-party advertisers and others or the use of the information that such third parties collect.  We have provided you with information below on their practices and available opportunity to exercise choice with respect to their Tracking Technology. 

You should review the relevant third party’s terms of service, privacy policy, permissions, notices and choices should be reviewed regarding their collection, storage and sharing practices.  

We make no representations regarding the policies or practices of third-party advertisers or advertising networks or exchanges or related third parties.  

6.4 Network Advertising Opt Out 

Further, while we may use a variety of companies to serve advertisements on the Service, you may wish to visit http://www.networkadvertising.org/optout, which provides information regarding this practice by Network Advertising Initiative (“NAI”) members, and your choices regarding having this information used by these companies, including the “opt-out” procedures of NAI members.  Opting out of one or more NAI members only means that those NAI members no longer will be allowed under their own rules to deliver targeted content and/or ads to you, which will affect this and other sites, but does not mean you will no longer receive any targeted content and/or ads.  Also, if your browsers are configured to reject cookies when you visit this opt-out page, or you subsequently erase your cookies, use a different Device or change web browsers, your NAI opt-out may not, or may no longer, be effective.  Additional information is available on the NAI’s web site accessible by the above link.  You may also opt-out of receiving third-party behavioral ads on this site by visiting the Digital Advertising Alliance (“DAA”) web site at http://optout.aboutads.info/.  Similar limitations may apply to the DAA opt-out.  We are not responsible for effectiveness of, or compliance with, any third-parties’ opt-out options or programs.]

7. Children Under the Age of 13

We offer the Services to businesses and individuals for the purchase and sale of life policy settlements, and it is not intended for use by minors, including children under the age of 13.  We do not knowingly collect personal information from children under the age of 13 such that parental notice and consent under the Children’s Online Privacy Protection Act (“COPPA”) would be required.  If you are a child under 13 years of age, you are not permitted to use the Services and you should exit this Site immediately.  

In the event that we become aware that we have collected personal information from any child, we will dispose of that information in accordance with COPPA and other applicable laws and regulations.  If you are a parent or guardian and you believe that your child under the age of 13 has provided us with personal information without COPPA-required consent, please contact us at info@harborlifebrokerage.com. 

8. Update and Accuracy of Personal Information

Keeping information accurate and up to date is important to us.  An individual may see and ‎correct ‎their Personal Information that we collect.  Contact us at the address provided below if you wish to ‎verify ‎your personal information.‎

If you request that we delete your Personal Information, please note that it is not always possible to completely remove or delete all of your information from our databases ‎and that residual data may remain on backup media.  We may retain some of your Personal Information even after you have asked to have it deleted if ‎reasonably necessary to comply with our legal obligations, meet regulatory requirements, resolve ‎disputes, maintain security, prevent fraud and abuse[, or enforce our Terms of Use.]  We may retain ‎de-personalized information after your account has been closed.‎

9. You May Opt out of Receiving Marketing Materials at Any Time

You may cancel or modify our e-mail marketing communications you receive from us by following the instructions contained within our promotional e-mails [or in some cases by logging into your Services account and changing your communication preferences].  

[If you subscribe to text messages from us, you can terminate a particular text message subscription by reply texting “STOP.”  Subsequent or different subscriptions will be unaffected.]  Please note that we reserve the right to send you certain communications relating to your account or use of our Services, such as administrative and service announcements and these transactional account messages may be unaffected if you choose to opt-out from receiving our marketing communications. 

10. Security Safeguards

We endeavor to incorporate commercially reasonable safeguards to help protect and secure your ‎Personal Information and Usage Information.  However, no data transmission over the Internet, ‎mobile networks, wireless transmission or electronic storage of information can be guaranteed to be ‎‎100% secure.  Please note that we cannot ensure the security of any information you transmit to us, ‎and you use our Services and provide us with your information at your own risk.  ‎

11. Questions

If you have questions about this Privacy Policy, you may contact HarborLife by writing us at 8700-A Gallant Fox Rd. Austin, TX 78737 USA, or by emailing us at [info@harborlifebrokerage.com‎]. If you send us an email to [info@harborlifebrokerage.com] with questions or comments about the Services, the Privacy Policy [, or the Terms of Use,] we will share your messages ‎with those within our organization who are most capable of addressing the issues contained in ‎your message.  We will keep a copy of your message until we have had an opportunity to address ‎your concerns.  We may archive your message for a certain period of time or discard it, but your ‎email address will not be used for any other purpose.‎‎‎  

Additional resources

Life Insurance Agents

Someday, history books will dedicate far too many pages describing the year of 2020. A pandemic-fueled economic crisis has caused many problems for U.S. households — but one outcome that will linger on for years is the damage done to Americans’ retirement plans. A study from The Commonwealth Fund estimates that, in 2020, 11% of workers aged 65 and older have lost their jobs. That’s 1.1 million people who likely have to overhaul their retirement outlook. Those who can’t replace their income may have no choice but to retire earlier than they’d planned, with a much lower savings balance than they’d like.

That presents an interesting challenge for financial advisors and planners. When your client faces an income shortfall just months or years away from reaching his or her retirement goals, what are the best options to course-correct? Downsizing is one, but it’s probably not the prospective retiree’s first choice. Another strategy is to get creative about liquidating non-investment assets to raise cash and shore up the savings balance. That’s where a life settlement can help.

What are life settlements?

A life settlement is the sale of a life insurance policy to a third-party investor for cash. At the close of the transaction, the investor owns the policy along with all rights to the death benefit. The investor is also responsible for any future premium payments. In return, the policyholder receives a lumpsum payment that can be used for any purpose, though a portion of the proceeds are normally taxable.

Are life settlements legal?

Life settlements are legal transactions nationwide. They’re also regulated in most U.S. states. The exceptions are Alabama, Michigan, Missouri, New Mexico, South Carolina, South Dakota, and Wyoming. Most regulated states enforce a waiting period before the policyholder can sell, though there may be exemptions available under certain circumstances such as illness, divorce, retirement, or disability. These states also typically require state approval of contracts, escrow agreements, and disclosures used throughout the life settlement process. That approval is intended to ensure transparency and protect policyholders from fraud — both of which are central themes in life settlement regulations.

What asset class are life insurance policies in?

Life insurance is its own asset class that falls under the umbrella of alternative assets. Characteristics that differentiate permanent and convertible life policies from other asset types include the tax treatment, low volatility, liquidity, streamlined wealth transfer, and versatility.

Tax treatment

The tax treatment of life insurance is very favorable to policyholders. For cash-value policies, investment savings grow without tax consequences. And, if the insured chooses to hold the policy until end-of-life, no taxes are incurred on the gain that naturally arises between cumulative premium payments and the amount of the death benefit. Life insurance gains only become taxable when the policyholder benefits from them during his or her lifetime. That happens when the policyholder pulls out more cash than was paid in total premiums, such as in a surrender or a life settlement.

Low volatility

Life insurance is not as volatile as equity assets and can have a low correlation to the financial markets. The rate of return on whole life insurance, for example, is guaranteed. Other forms of life insurance, such as variable life, do allow the policyholder to invest in sub-accounts that are tied to the financial markets. These policies can be structured so that only the cash value growth, but not the death benefit is affected by market fluctuations.


New life insurance policies are not liquid, though they do gain liquidity as the cash value grows over time. Once the policy has accumulated cash value, policyholders can access that cash very quickly, either through a direct withdrawal or a low-rate loan. Those policyholders who no longer want or need the insurance can also liquidate their asset by surrendering the policy or selling it in a life settlement.

Simple wealth transfer

Life insurance shines as a straightforward strategy for leaving money to heirs. Named beneficiaries receive the death benefit in cash without probate and without tax consequences.


Life insurance can be extremely versatile. Its cash value grows without tax consequences and can later be used to supplement one’s retirement income. Or, if cash is not needed from the policy, it can be left alone until the named beneficiaries receive their tax-free death benefit. No other asset type offers that combination of liquidity, tax-free earnings growth, and simple wealth transfer.

Why are life settlements beneficial for your clients?

A life settlement is often the most fruitful method to liquidate life insurance, since life settlement investors normally pay more than the policy’s surrender value. In some cases, policyholders can get as much as 60% of the policy’s face value. The extra cash could solve a retirement savings shortfall, without requiring a lifestyle downgrade or a reverse mortgage.

What types of life insurance policies qualify for a life settlement?

Individual and group universal life, variable life, whole life, and convertible term life policies normally qualify for life settlements. Non-convertible term life is sometimes sellable, depending on the status of the level-term period and the health of the insured.

What is your role as a financial advisor?

Fiduciary duty is the legal responsibility to act in the best interests of your client. In practice, that usually involves being transparent about how you get paid, avoiding conflicts of interest, and making personalized, objective recommendations to clients based on their situation, goals, and risk tolerance. Those principles apply whether you’re a CPA, tax advisor, estate attorney, financial planner, or retirement advisor. In any one of those roles, you might be the one fielding the client’s question about how to improve liquidity. If the client has life insurance, a life settlement may be an option to explore. If your client is interested in selling their life insurance, you’ll want to make sure you’re getting the highest value for their policy. Harbor Life helps get you the highest possible offer through its partnership with Harbor Life Brokerage, which utilizes an online life settlement auction platform that puts your client’s policy in front of the nation’s top providers. By putting the policy in front of more providers, you’ll get more offers which will drive up the value.

How to talk with clients about life settlements?

You can start the life settlement conversation with clients by taking inventory of their existing life insurance policies. Review the beneficiaries, death benefits, and premiums. Revisit your client’s goals with respect to end-of-life wealth transfer and your client’s willingness and ability to continue making premium payments. If your analysis uncovers redundancies or unnecessary coverages, it could be time to discuss options for liquidating or eliminating some of those policies.

The options including lapsing, surrendering, or selling the unwanted life insurance. Letting a policy lapse wouldn’t normally provide any cash proceeds, though it would keep the policy in force for a longer period of time. The policyholder would simply stop making premium payments. The insurance company would use any accumulated cash value to fund those payments going forward, until the cash runs out. There is a grace period, but the insurer will eventually cancel the insurance if no payment is made.

Surrendering the policy cancels the coverage immediately. The insurer pays the policyholder any accumulated cash value, less surrender fees. Surrender fees can be very high if the policy is only a few years old. Any gains recognized as a result of the surrender payment would normally be taxable.

Selling the policy in a life settlement usually results in higher cash proceeds for the policyholder, but the process can take two to four months to complete. As with a surrender, gains on the policy are usually taxable.

How do life settlements benefit financial advisors?

As a financial advisor, you build trust by objectively educating your clients about all of their options. For the client who has excess life insurance and a savings shortfall, the life settlement may be one of the least intrusive solutions. Prospective retirees who’re worried about losing a home, running out of money, or being forced into a lifestyle downgrade should appreciate the guidance. Whether or not they ultimately decide to pursue a life settlement, they should understand that it’s an option — especially if they’ve already considered surrendering or lapsing the insurance policy.

Also know that the life settlement industry continues to grow and mature. With that growth comes greater regulatory protections, not only for sellers and buyers, but also for advisors. That is a welcome change, as it helps legitimize these transactions which can be so beneficial to seniors who are facing cash shortfalls.

Financial Advisors: How to Talk to Clients About a Life Settlement Option

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Retirement is more expensive than it used to be. Seniors today live longer and spend more on healthcare than any other generation. Today’s seniors are also largely underfunded. A 2020 TD Ameritrade report concludes that 33% of seniors aged 70 to 79 have less than $100,000 in their savings. Those aged 60 to 69 are even worse off, with 38% having less than $100,000 saved. In that context, the life settlements may be an increasingly popular solution to help cash-strapped seniors.  A life settlement is the sale of a life insurance policy to a third-party investor for cash.

Life settlements have become more popular in recent years, even as false or misleading information about them circulates among broker-dealers and insurance policyholders. There are a few factors driving the spread of misinformation. For one, the life settlement industry is fairly young. And while these transactions are regulated in most states, the exact regulations can vary from state to state. Secondly, life insurance companies have shown resistance to the ongoing growth of the life settlement industry. While there is a perspective that life settlements actually benefits insurer by making their product more valuable, not everyone sees it this way. The opposing view is that insurers profit more on a surrendered policy than on a life settlement.

The rumors, misinformation, and myths about life settlements won’t prevent the industry from growing. But they could financially harm seniors. Would-be policy sellers, for example, may hold off on a life settlement because they’re confused about how it would work. Or, worse, they may disregard their life insurance as a source of cash because they’ve heard “facts” that are simply untrue.

If you are a senior who’s interested in liquidating your life insurance, you should know the real truth about life settlements. That’s the only way you can make an informed decision on whether a life settlement is right for you. A good first step is to review our breakdown of the five most common life settlement myths below. If you’ve ever discussed life settlements with a broker dealer, you’ve may have heard one of two already.

Myth #1: Life settlements are not legal or regulated

Fact: Life settlements are both legal and regulated. The legality of selling life insurance was established in the early 20th-century when the Supreme Court ruled on Grigsby v. Russell. Grigsby was a physician who purchased a life insurance policy from his patient, John C. Burchard. Burchard needed an operation but didn’t have the funds to pay for it. He offered to sell Grigsby his life insurance as payment. Grigsby paid Burchard $100, performed the operation, and then assumed responsibility for the policy’s premium payments.

Later, after Burchard had passed, the executor of Burchard’s estate disputed the transaction, arguing that the death benefit should have been paid to Burchard’s estate and not to Grigsby. The Supreme Court ruled squarely in favor of Grigsby, stating that life insurance is an asset and, therefore, can be legally sold to another party.

Today, life settlements are regulated in 43 states. Those regulations commonly cover disclosures, accepted business and advertising practices, licensing of settlement providers and brokers, and life settlement contract language. These statutes are largely designed to protect policyholders, agents, brokers, and insurance companies from fraud.

Myth #2: Life settlements are only for terminally ill individuals

Fact: You do not need to be terminally or chronically ill to sell your life insurance in a life settlement. The primary requirements for a life settlement are that you are at least 70 years old and your policy is valued at $50,000 or more.

The broker-dealer who says you have to be terminally ill to sell your insurance is likely confusing the life settlement with a viatical settlement. While life settlements and viatical settlements are similar, there are some important distinctions between these two transactions. For one, viatical settlements close much more quickly than life settlements. A life settlement might take one to three months to complete, while the viatical settlement process only takes a few weeks. These are expedited because the policyholders generally needs the funds right away.

Taxation rules for viatical settlements vs. life settlements differ as well. Viatical settlement proceeds are usually not taxable, while a portion of life settlement proceeds can be taxable.

Myth #3: There are rules on how people can spend money from a life settlement

Fact: There are no rules on how you spend the proceeds from a life settlement. The money is yours to use as you wish. You could, for example:

  1. Pay down debt. If your debt is strangling your fixed-income budget, use your life settlement proceeds to pay off credit card debts or even a mortgage.
  2. Pay for healthcare, nursing home care, etc. Many seniors are motivated to sell their life insurance to free up cash for healthcare and related services.
  3. Fund your living expenses. Even if debt isn’t a problem, an influx of cash can help with daily living expenses over time.
  4. Create an emergency fund. A healthy emergency fund allows seniors to manage through unexpected expenses without increasing their retirement distributions. The challenge many seniors face, however, is refunding cash savings once it has to be used for something. A life settlement could easily solve that issue.
  5. Invest the proceeds for dividend income. Life settlement proceeds can also be invested for future dividend income.
  6. Spend the money on vacations or upgrade your lifestyle. Yes, you can use your life settlement proceeds to take a trip around the world or to buy an RV.

Myth #4: People can get more money by surrendering their policy

This may be the most damaging life settlement myth of all. Unfortunately, too many broker dealers repeat this myth — either because they believe it or because they don’t want you to know that the opposite is true.

Fact: Life settlements generate more cash than life insurance surrenders. In fact, you may be able to get up to 60% of your death benefit by way of a life settlement. This makes sense; the only reason the life settlement industry exists is because investors are willing to pay more than surrender value for your life insurance. Few policyholders would logically choose a life settlement if a surrender was more lucrative.

You can also debunk this myth yourself. Contact your life insurance company and ask what your policy’s current surrender value is — without committing to anything. Then, contact Harbor Life Settlements and get a free, no-obligation estimate on your policy’s market value. Compare the two numbers and decide for yourself.

Myth #5: You have to be a life insurance expert to offer life settlements to clients

Many financial and legal advisors today just aren’t that familiar with life settlements. Because they lack experience with and exposure to these transactions, they may feel uncomfortable discussing them with clients. The real truth is that your advisor doesn’t have to be an expert in life settlements. His or her knowledge can be limited to the understanding that life insurance can be sold to a third-party for more than the policy’s cash surrender value. The advisor who masters that concept can easily recognize when it might be time to mention life settlements, such as:

  • When a client wants to surrender a policy
  • When a client needs cash, but doesn’t have other sellable assets
  • When a client no longer wants to pay life insurance premiums

Advisors who don’t feel comfortable explaining life settlements to a client can easily loop in the Harbor Life Settlements team to lead that discussion. Harbor Life Settlements can also provide a free, no-obligation estimate for the policy’s value — information the client would need before deciding if a life settlement is the right move anyway.

If you or a client has a life insurance policy that’s no longer needed, choose to deal in facts instead of myths. Contact our team today to find out what that policy is really worth.

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Life Insurance

Life insurance is a long-term asset. Over the decades a life insurance policy is in force, your client’s financial situation is likely to evolve. Sometimes, that evolution is so significant that the existing life coverage is no longer a good fit.

When that happens, your client will look to you for a recommendation on how to optimize their coverage cost effectively. One option to discuss is the 1035 exchange. To prep for those conversations, here’s a closer look at how 1035 exchanges work, their advantages and disadvantages, and alternative strategies to consider. 

What is a 1035 exchange on a life insurance policy? 

A 1035 exchange is a tax-free method for replacing an existing life insurance policy.  The number 1035 refers to the section of the tax code that defines and allows for this transaction. 

How 1035 exchanges work 

Typically, cashing out a life insurance policy is taxable if the proceeds are more than the client’s cost basis. Any tax liability, of course, lowers the client’s budget for new coverage. The 1035 exchange waives the normal tax consequences, but under strict guidelines. A few 1035 exchange rules are:  

  • The owner and the insured on the new policy must match the owner and insured on the old policy.
  • The policyowner cannot take possession of the proceeds from the old policy — the life insurer(s) must handle the transfer. 
  • If the old contract is life insurance, the new contract must also be life insurance. This is important to point out because Section 1035 exchanges can also be used for annuities. In that case, the exchange must be from one annuity to another annuity — not from life insurance to annuity or vice versa. 

For the client who does qualify for the exchange, any gain in the old insurance policy gets transferred to the new policy. If the client later cashes out the new policy, there may be tax consequences.

Who needs a 1035 exchange?

A section 1035 exchange is for the life insurance policyowner who wants to update coverage but has a taxable gain in an existing policy. If the client’s surrender value of the existing policy doesn’t exceed the total premium payments, there’s no taxable gain. In that case, a 1035 exchange isn’t needed.

Pros and cons of 1035 exchanges 


The primary advantage of doing a 1035 exchange is the tax deferral. Your client can secure a policy with more favorable terms, without incurring a big tax bill. 


A tax deferral on a sizable gain can be a huge advantage — but it doesn’t always outweigh the disadvantages of a 1035 exchange on life insurance. Potentially negative outcomes to consider include: 

  • Less efficient insurance premiums on the new policy due to age or health. An older life insurance policy, priced when your client was younger and healthier, is likely to have lower premiums. A new policy will consider your client’s current age, health, and lifespan (which dictates how many premium payments will be made going forward).
  • Surrender charges could reduce proceeds on the old policy. Surrender fees can be very high in the early years of the policy. Older policies may have low or no surrender fees.
  • First-year policy expenses, such as commissions, may consume the cash value in the old policy. Fees on a new policy can reduce the efficiency of the 1035 exchange.
  • 1035 exchanges get more complicated if there is an outstanding policy loan. Completing a 1035 exchange on a policy with an outstanding loan is called a loan rescue. Not all insurance carriers do loan rescues. If a client does a 1035 exchange and the policy loan isn’t transferred in full, the unpaid balance is probably taxable.

    Your client may want to pay down the loan prior to the exchange to avoid those complications. Alternatively, the client could reduce the size of the policy to offset the loan the balance. This strategy should be handled carefully, however. The IRS may view the policy reduction and the exchange as a single transaction, even if they happen in two separate steps. In that case, the loan balance may still be taxable. To avoid that outcome, several months should separate the reduction and the exchange.    

Alternatives to a 1035 exchange 

Based on your client’s situation, the 1035 exchange may not be the ideal solution. Fortunately, there are other ways for policyholders to upgrade or modify their insurance coverage. Three alternatives are a life settlement, purchasing a new policy and keeping the old one, or surrendering and replacing the life insurance outside of a 1035 exchange.  

1. Life settlement 

A life settlement is the sale of life insurance to a third-party for a lump sum of cash. Policyholders who are 65 or older usually qualify, as long as the policy is valued at $50,000 or more. 

The life settlement is not a tax-free transaction. The portion of life settlement proceeds that represents a gain is usually taxable. 

Still, the life settlement can be an attractive alternative to a 1035 exchange. This is because the sale price will be much higher than the policy’s surrender value. Often, life insurance will sell for two to four times more than its surrender value, or up to 60% of the death benefit. Net of taxes, that may leave your client with more cash to spend on new coverage. 

If the net cash proceeds are more than what’s needed to buy replacement coverage, your client can spend or save the extra cash. There are no restrictions on how those proceeds are used.

Also, since there’s no tax deferral on a life settlement, any new coverage the client purchases won’t inherit the taxable gain from the old policy.

2. Purchase additional insurance 

The client who needs additional life insurance could also purchase supplemental coverage and keep the old policy in force. This can be more cost-efficient than exchanging a smaller policy for a larger one. 

If the new premiums are higher because the policyowner is older, for example, it makes sense to keep the existing policy. That way, the higher premiums only apply to a portion of the client’s overall coverage. 

3. Surrender and replace without a 1035 exchange 

When there’s no taxable gain hiding in the client’s existing life insurance, there’s no need to do a 1035 transfer. The client instead could surrender the old policy and buy a new one, with no tax consequences. 

Before moving forward on this strategy, compare the potential after-tax proceeds from a life settlement to the existing policy’s surrender value. If the life settlement is more lucrative — and often, it is — then a surrender probably isn’t the right option. 

You can learn more about the pros and cons of life settlements at HarborLifeSettlements.com. Our team offers free life insurance appraisals. The value of your client’s life insurance on the secondary market is a key consideration when evaluating a 1035 exchange. If the client can come away with more cash through a life settlement, your client may prefer that strategy over a 1035 exchange. 

Reach out to Harbor Life Settlements today to learn more.

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