What does the term "life settlement broker" refer to?

The term "life settlement broker" refers specifically to an individual or entity that is licensed to negotiate life settlement contracts on behalf of policyholders. Life settlements involve the sale of a life insurance policy to a third party for a value that is less than the policy's death benefit but more than the cash surrender value. This process is designed for policy owners who may no longer need or want their life insurance and are looking to convert it into cash.

The role of the life settlement broker is crucial as they act as intermediaries between the policyholders and potential buyers, ensuring that the interests of the policyholders are represented during the negotiation process. They have the expertise to assess policies, navigate the legal requirements, and secure the best possible settlement value.

In contrast, the other options describe different roles or activities that do not align with the specific functions of a life settlement broker. For instance, selling life insurance policies is not the same as negotiating settlements, investing in life insurance policies refers to acquiring policies as assets rather than facilitating their sale, and acting as a representative for insurance companies focuses on the sales aspect without involvement in the secondary market dynamics that brokers engage with.