What if there were more options for your life insurance than you realized?

 

Lisa Rehburg, life settlement broker joins Tony on Get Ready Before Life Happens to talk about what people should know when a life insurance policy no longer fits. Lisa explains how life settlements work, why reviewing your options matters, and how to make more informed decisions before letting a policy lapse or surrendering it.

 

Key Takeaways

 

• Ask whether the policy is still doing its job.
• A life settlement may offer another option before surrendering or lapsing a policy.
• Life settlements aren’t just for when the insured is severely ill.
• A life settlement broker can help create competition among buyers.
• Licensing, experience, and specialized knowledge matter when working with life settlements (or anything for that matter). 
• Regulation, transparency, and privacy protections are important parts of the process.
• Review all options before making a long-term policy decision.

 

Tony’s Take:Life insurance is risk protection first. If a policy protected your family, business, or estate for years, the premiums were not wasted. However, life changes, and the better question becomes: is this policy still doing the job I need it to do? A life settlement is not always the answer, but knowing it exists can help people make better decisions before life happens.

 

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Connect with Lisa Rehburg: 

 

Website: https://www.rehburglifesettlements.com

LinkedIn: https://www.linkedin.com/in/lisarehburg/

 

Bio: 

 

Lisa Rehburg is President of Rehburg Life Insurance Settlements, a life insurance settlements broker.  Ms. Rehburg is passionate about assisting financial, insurance, legal and non-profit professionals to help their clients benefit from their unwanted or unneeded life insurance policies.  Lisa has been in the health and life insurance industries for over 35 years.  She has presented to hundreds of organizations, including various Financial Planning Associations, Fiduciary Associations, Estate Planning Councils, Planned Giving Roundtables, NAPFA, NAIFA and Health Underwriters Associations, to raise the visibility of life insurance settlements as an option for clients, when appropriate.   She has held executive roles at carriers, general agencies and TPAs.   She holds a Bachelor of Arts degree in Finance and a Master of Arts degree in Organizational Development.  She can be reached at (714) 349-7981, [email protected], [email protected],  or www.rehburglifesettlements.com. 

 

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Transcript

Tony Steuer:
What if there were more options for your life insurance than you realized? 

Welcome to Get Ready: Before Life Happens. I’m your host, Tony Steuer.

Today, I’m joined by Lisa Rehburg, a life settlement broker.

Lisa, welcome to Get Ready: Before Life Happens.

Lisa Rehburg:
Thank you so much, Tony. It’s such a pleasure to be here.

Tony:
I’m excited to have you because this is something you and I were talking about before the show, and I really wanted to feature it on the podcast.

Let’s jump into it.

What led you to focus on life settlements, and why are you passionate about them?

Lisa:
I’ve been in the insurance business for 40 years, which blows my mind because I’m 28 in my head.

For all that time, I’ve worked with insurance agents and financial advisors.

I spent many years in corporate America.

About 10 years ago, I decided it was time to stop being in an airport every week and actually be home.

So I left my corporate job and did the whole T-square on a yellow legal pad.

What do I love to do?

I love working with advisors.

I love educating.

I love all those things.

But I didn’t want to bring another product to market that people already knew about.

I wanted to do something different.

I found life settlements and spent a year researching them.

Are they legal?

Are they regulated?

What do I need to know?

I wanted to be sure I wasn’t going to introduce advisors and agents I knew to something that wouldn’t work for them.

I fell in love with life settlements.

And I think they’re going to become even more important as our population ages.

It can be a win for everyone.

It’s also a way for advisors to help clients in an area they may not know much about.

Nothing is better than calling a client or advisor and saying, “The wire transfer just went out,” or, “The check is on the way.”

That’s my favorite part of the process.

Tony:
Life settlements are definitely one of the more misunderstood parts of the life insurance industry.

So let’s break it down.

What do you actually do as a life settlement broker, and how does that help people understand their options?

Lisa:
In a nutshell, our fiduciary duty is to the client.

We market the policy to many different buyers to obtain the highest offer we can.

That’s important because buyers are advertising on television and all over the internet.

I understand their perspective, and I’m not criticizing buyers.

They’re an important part of the market.

But when clients call a buyer directly, there’s no competition.

The buyer has no incentive to offer the highest amount.

They’re trying to buy the policy as inexpensively as possible.

It’s no different from buying a car.

If I’m trying to buy a car, I’m not trying to pay the highest possible price.

Neither are they.

The less they pay for the policy, the more profit they can make.

Because we have access to many buyers, we introduce competition.

Our superpower is leverage.

We leverage the buyers against each other to maximize value for the client.

For example, we recently sold a $1 million term policy.

The opening offer was $100,000.

By the time we were done, it was $480,000.

I’m proud of that work.

It’s a joy to maximize value for clients.

Tony:
That’s something people can miss.

If you’re not in life settlements yourself, you’re starting with a knowledge disadvantage.

So first, it helps to have someone guide you through the process.

And second, competition matters.

A buyer naturally wants to pay as little as possible.

A seller wants to receive as much as possible.

A broker can help create that competitive process.

Lisa:
That’s exactly right.

I see it every day, and I’m proud of the work we do.

Tony:
What perspective shaped the way you approach life settlements?

What sparked your particular approach?

Lisa:
First, I loved that it was different.

I also loved that it could help people sell an asset they didn’t know they had.

It can create money from something people may otherwise walk away from.

A lot of the insurance agents and financial advisors I knew either didn’t know about life settlements or had misperceptions about them.

So it became another way for them to serve clients.

Clients may have held a policy for decades.

If they no longer need it and are going to walk away with nothing, a life settlement may give them another option.

We’re here to see whether we can get them more money.

Tony:
Let’s break that down.

How does a life settlement actually work?

Let’s say I have a $1 million policy and I come to you.

What happens next?

Lisa:
It depends on what you want to do.

And I want to qualify this by saying the vast majority of the business we do comes through insurance agents and financial advisors who are having conversations with their clients.

A client may say, “This policy is getting expensive.”

We hear that all the time.

Or they may say, “I have this term policy and I’m coming to the end of the term. Do I really need to continue the coverage? Should I convert part of it?”

If someone is converting part of a term policy, selling the balance may make sense.

If they don’t plan to convert any of it, selling the term policy may also make sense.

The real question is: is the policy still doing its job?

Maybe the client bought it 15 or 20 years ago.

Now the house is paid off.

The kids are grown.

Maybe the business has been sold.

Life happens and life changes.

It’s a good conversation to have.

Is this policy still needed?

And if it has become a financial drain, that becomes even more important.

As we get older, budgets can become more limited, and policies can become expensive.

Tony:
That’s an important point.

The life insurance industry often talks as though people need life insurance forever.

In reality, needs can change.

There are certainly reasons some people may need life insurance for life.

But for many people, as other assets grow, the need for life insurance can decrease.

If you were protecting a mortgage or replacing income until your assets grew, eventually that need may change.

It’s okay to reevaluate a policy when it no longer fits.

Lisa:
We see that every day.

One thing we see a lot is universal life policies where the cash values have decreased as the cost of insurance has gone up.

The client may have been paying $125 a month for 25 years.

But now the actual cost of insurance may be $800 a month.

We recently sold policies for a husband and wife.

Each policy had a $250,000 death benefit.

The premium to carry each policy was about $15,000 a year.

They were 80 and 81.

They asked, “Do we really need $250,000 on each other?”

The answer was no.

It had become too much of a financial strain.

We were able to get about $20,000 on one policy and $10,000 on the other.

So they received about $30,000 from selling the policies.

And just as important, they also freed up roughly $30,000 a year in cash flow.

For a lot of people, that’s what it comes down to.

I’m not saying this is right for everybody, because it isn’t.

But when the client and advisor have had the conversation and the decision has been made that the policy is no longer needed, affordable, or appropriate, or perhaps the client wants to repurpose the value toward long-term care, that’s where we come in.

We’re the last stop on the bus line.

We’re here to see whether the client can get more than they would by lapsing or surrendering the policy.

Tony:
That’s the key.

A life settlement is another option alongside lapsing or surrendering.

You also brought up an important point about older universal life policies.

Many were sold in higher interest-rate environments.

As interest assumptions changed and insurance costs increased, the policies didn’t always perform the way people expected.

That’s why I often tell people to get an in-force illustration on a life insurance policy so they can understand how it’s actually projected to perform.

Once you understand the policy, then you can start evaluating your options.

Who typically benefits from exploring a life settlement?

Is there a certain type of policyholder who tends to fit?

Lisa:
I use the word “typically” a lot because there aren’t hard-and-fast underwriting rules in our market.

Typically, we’re working with seniors.

Think about it from the buyer’s perspective.

They’re generally looking for a life expectancy of around 10 to 15 years or less.

Sometimes it can be longer, maybe up to 20 years in certain cases, but that’s less common.

Let me also explain what actually happens in a life settlement.

The client receives a lump sum of money.

In exchange, they transfer ownership of the policy to the buyer.

The buyer takes over the premium payments and becomes the beneficiary.

For the buyer, the policy is an investment.

So both sides are important.

Without buyers, clients can’t receive money.

In terms of who qualifies, we’re usually talking about people in their 70s and 80s, sometimes 90s.

We do have clients in their 50s, but typically they have significant health issues that fit the life-expectancy window.

If you’re 30 years old and running marathons, this probably isn’t going to be an option.

If you’re 55 and running marathons, probably the same thing.

The other thing we see a lot is universal life policies that have become expensive to maintain.

That’s probably our number-one volume seller.

A very close second surprises people.

We sell a lot of term policies.

Term policies have no cash value.

So if someone can get money from a term policy, that can feel like found money.

The term policy usually needs to still be convertible to a permanent product.

That isn’t always the case, but most of the time it matters.

We can also sell other types of policies, including whole life and second-to-die policies.

Whole life can be more difficult because it often has more cash value and higher premiums.

In our world, less cash can sometimes make the policy more attractive.

So whole life can absolutely be sold.

It’s just often more difficult.

Tony:
That’s an excellent point.

The big takeaway for people is that this is another option.

It’s something advisors and financial planners should be aware of before a client simply surrenders or lapses a policy.

Once you’ve reviewed the insurance and decided the client no longer needs it, this becomes another question to ask.

Does a life settlement make sense?

So now that we’ve talked about the positives, what should people watch for when evaluating a life settlement?

Lisa:
First, make sure the person you’re working with is qualified.

And full disclosure, I’m a broker, so of course I believe in working with a broker.

Make sure they’re licensed.

Make sure they’ve been doing this for a while.

Make sure they’re truly an expert in this field.

You need to know what you’re doing.

You need access to many buyers.

You need access to the right buyers.

You also need good relationships with those buyers.

My fiduciary duty is to the client, but I still need strong working relationships in the market.

That matters.

I would be cautious with someone who does a lot of different things and says, “Oh, by the way, I also do life settlements.”

That may not be the best fit for a client’s life insurance policy.

Tony:
That’s a great point.

I often tell people to think about financial professionals the way they think about doctors.

You have general practitioners and specialists.

You wouldn’t go to a cancer specialist for a knee problem.

Financial services can work the same way.

Sometimes you need a specialist in a particular area.

A generalist may do a great job covering many things.

But when the issue becomes specialized, it helps to work with someone who does that work every day.

Lisa:
Exactly.

People can also create problems when they try to manage the process themselves.

I’ve seen clients contact four or five buyers on their own and then call me.

That can get chaotic very quickly.

The market is large in some ways, but there isn’t an unlimited number of buyers.

It’s a fairly finite market.

So the bottom line is: don’t try this alone.

Tony:
That makes sense.

It reminds me of applying for multiple loans yourself and muddying the waters.

It doesn’t mean someone absolutely can’t DIY it.

But most people aren’t going to spend the time to learn the market the way someone who does it every day has.

A good broker may be able to create more competition and potentially get a better result.

Lisa:
And it can be stressful.

We just completed a sale for a client who tried to do it himself first.

He found the process very stressful.

I told him, “What you’re feeling is what we do in the background so you don’t have to feel it.”

What the client ideally experiences is me calling and saying, “I got a higher offer.”

They don’t need to feel all of the internal workings.

Tony:
That’s a fantastic point.

Lisa, what are three things people should know when a life insurance policy no longer fits their life?

Lisa:
First, life settlements exist.

A lot of people and even some advisors either don’t know that or have misconceptions about them.

Second, this is a legal and highly regulated market.

That’s very important.

Brokers are regulated.

Buyers are regulated.

The industry is regulated through state departments of insurance.

There are significant compliance requirements for good reasons.

Beneficiaries may need to sign off.

When you use a broker, there’s also a lot of transparency.

We’re paid commissions for our work.

Those commissions are disclosed.

Clients sign off on them.

We also disclose every offer a client receives and the buyer that made the offer.

Another safeguard is that the client’s doctor typically signs a statement indicating that the client has the mental capacity to complete the transaction.

No one wants any question of coercion or something inappropriate happening, especially because many clients are seniors.

If there’s a capacity issue, such as Alzheimer’s or Parkinson’s, a properly established power of attorney may be involved.

But the point is that there are protections and procedures around the transaction.

Tony:
That’s an important point.

Some people remember the earlier days of stranger-originated life insurance and think of life settlements as the Wild West.

The market today is very different.

Transparency matters.

Regulation matters.

And the protections you’re describing matter.

Lisa:
One thing I should also mention is that we only sell policies to buyers that have been approved by the Department of Insurance in the client’s state.

This tends to be institutional money.

We’re not selling someone’s policy to their next-door neighbor.

That idea makes people uncomfortable, and understandably so.

The buyers we work with, often called providers, have to be approved.

They need to demonstrate HIPAA protections.

They need to provide financial information.

And they report to the Department of Insurance on the policies they’re purchasing.

There’s traceability.

I’ve sold a good friend’s policy.

She later came back to me to sell her husband’s policy.

These are people I care about.

I’m comfortable with the market and the process.

Tony:
That’s important context.

A $1 million or $10 million policy sounds like a lot of money to you and me.

For an institutional investor managing billions, it can be a small part of a much larger portfolio.

They’re looking at it as a business transaction.

Lisa:
Exactly.

For them, it’s partly about returns, but it’s also about diversification.

Life settlements aren’t directly tied to stock-market movements, bond markets, or commodities.

That’s one reason institutions use them as a diversification tool.

Tony:
That makes sense.

They’re creating portfolios of many policies.

They don’t know exactly when any one policy will mature, but across enough policies, they can model expected outcomes.

That’s another reason competition matters.

The buyer wants to pay as little as possible to improve the economics of the investment.

So Lisa, to wrap up, I have what I call the Get Ready Hot Take Trio.

These are three quick questions I ask all my guests.

What’s one myth about life settlements you would like to break?

Lisa:
That you have to be really, really sick to sell your policy.

Nothing could be further from the truth.

Tony:
That’s an important takeaway.

You don’t have to be severely ill.

Of course, if you’re 25 and running marathons, there isn’t going to be much of a market.

Lisa:
There won’t be a market.

And if there is, you should be very suspicious.

Tony:
Exactly.

There’s a middle ground.

Let’s get out the time machine for a minute.

What advice would you give your younger self knowing what you know now about life insurance?

Lisa:
I would evaluate all of my options for the long term.

Sometimes people focus on a short-term goal.

“I only expect to have this mortgage for 10 or 15 years.”

“My kids will be out of high school by this age.”

So they only think about coverage through that point.

I think it’s useful to have a broader view of what life insurance can do as a financial tool.

When you’re younger, you may be healthier and qualify more easily.

Rates may also be lower.

So I think I would look at the long-term picture first.

Tony:
That’s good advice.

Look at the long term and then work backward to fill the shorter-term needs.

When you’re 25, age 60 feels very far away.

But it comes.

Lisa, to wrap up, what’s your number-one tip for helping people change the way they think about money?

Lisa:
I’m not a financial advisor, CPA, or general financial expert.

I’m a life settlement expert.

So I’ll focus on what I know.

I would encourage people to think about their life insurance policy as an asset.

A lot of people don’t think of it that way.

They’ll say, “I paid all these premiums over the years, and now that money is wasted.”

Here’s how I think about it.

You had the use of the policy for 20 years.

If something had happened to you during that time, your beneficiaries would have received the benefit.

Now, if the policy is no longer needed, let’s see whether it has value that can be realized.

I think of past premiums like gas in the car.

You used the car.

Now let’s see what the car may be worth if you decide to sell it.

And there’s one more point I really want people to know.

Millions of life insurance policies are lapsed or surrendered every year.

Only a very small number are sold through life settlements.

I’m not saying every one of those policies would qualify.

That’s not the case.

But I do think far more people could explore the option than currently do.

Visibility and education are a big part of that gap.

Life settlements are here.

We’re here to help when the situation is appropriate.

Tony:
I love that.

And I want to go back to something you said about premiums.

Paying premiums doesn’t mean the money was wasted.

I hear this argument all the time around life insurance.

People will say, “Don’t buy term insurance because you’ll waste your money if you outlive the term.”

But nobody is upset when their house doesn’t burn down and they never collect on their homeowners insurance.

We understand that we’re paying for risk protection.

Life insurance is risk protection too.

A life settlement simply creates another option when it’s time to wind down that protection.

Lisa:
Exactly.

I recently had a conversation with a family member who referred to their “investment” in a life insurance policy.

I stopped them and said, “You don’t have an investment in the policy.”

The premiums were for the policy to do its job.

The policy protected your family if something happened to you.

That’s not the same as an investment.

I don’t consider my homeowners insurance an investment either.

It’s there to protect my family and me if something happens to our home.

Life insurance is the same way.

And frankly, I’m happy when my insurance doesn’t pay off because that means nothing bad happened.

Tony:
I think that’s the drop-the-mic moment for this conversation.

Insurance is risk protection.

And a life settlement can provide another option when it’s time to terminate that protection.

That’s really what this episode boils down to.

Lisa:
Indeed it is.

Tony:
Lisa, where can people learn more about you and your work?

Lisa:
My website is RehburgLifeSettlements.com.

My phone number is 714-349-7981.

And my email is [email protected].

Tony:
Fantastic.

For everybody watching and listening, as always, there will be links in the show notes.

Lisa, thanks for joining us on Get Ready: Before Life Happens.

Lisa:
It’s been a pleasure.

I love raising visibility and having these conversations.

I’m grateful for the opportunity.

Tony:
I appreciate you sharing this with everyone.

The takeaway for me is that when a life insurance policy no longer fits, people may have more options than they realize.

A life settlement is not right for every person or every policy.

But knowing it exists can help you make a more informed decision before life happens.

Start your free Financial Readiness Plan at tonysteuer.com. It is a practical way to begin building your in-case-of-emergency plan before life happens.

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Because when life happens, the way you think about money matters.