Conventry Direct: A Review for Life Policy Owners

Rebecca Parson
Rebecca Parson

Rebecca Parson

Author

Rebecca Parson is a financial and tech writer with 10 years of experience writing about topics such as life insurance, commodities investing, and the SaaS industry. She has a master’s degree from Johns Hopkins University and a bachelor’s degree from the University of Mary Washington. Her writing has appeared at money.com, sacbee.com, cart.com, herodevs.com, blanchardgold.com, and more.

Brian OConnel
Brian OConnel

Brian O'Connel

Contributor

Brian O’Connell has been a contributing writer for U.S News & World Report since 2016. A former Wall Street bond trader and the author of two best-selling books; “The 401k Millionaire” and “CNBC’s Creating Wealth”, he has 20 years experience covering business news and trends, particularly in the business and financial sectors. He believes education is the best gift a financial consumer can receive – and brings that philosophy to every story he writes. His byline has appeared in dozens of top-tier national business publications, including CBS News, Bloomberg, Time, MSN Money, The Wall Street Journal, CNBC, TheStreet.com, Yahoo Finance, CBS Marketwatch, and many more.

By Rebecca Parson, Brian O'Connel
Author, Contributor, Life Insurance

If you’re reading this, you’re probably thinking about selling your life insurance policy and have come across Coventry Direct in your research.

It makes sense that you’re looking for a Coventry Direct review — the company is by far the largest life settlement provider and buyer in the U.S. 

Our clients have often seen Coventry Direct ads and ask us about the company, so we thought we’d write up a fair assessment of the company’s pros and cons. By the end, you’ll have more information to make an informed decision for yourself.

If you have more questions, don’t hesitate to give us a call. We have 16 years of experience in the industry and are happy to help.

7 Things to Know About Coventry Direct

1. Coventry Direct Is the Largest Life Settlement Provider in the U.S.

According to the company’s marketing, Coventry Direct and its affiliates bought “over 45% of all life settlement transactions in 2021.” The company conducted the first-ever life settlement transaction and has been in business for over 40 years.

Coventry Direct has a long history and is the largest player in the market, which speaks to its staying power as a company. 

2. Coventry Direct is Not a Traditional Life Settlement Broker

A traditional life settlement broker is there to represent you, the owner of the life insurance policy. By contrast, a life settlement provider either works for the funder (buyer) or is the buyer. In either case, a provider doesn’t work for you and doesn’t have a fiduciary responsibility to you.

As the Washington State Office of the Insurance Commissioner says:

“A life settlement broker negotiates life settlement contracts between an owner and providers. A life settlement broker represents only the owner and owes a fiduciary duty to the owner to act according to the owner’s instructions, and in the best interest of the owner.”

Coventry Direct is a life settlement provider, not a broker. So, when considering whether to sell your life insurance to Coventry Direct, keep in mind that the company doesn’t have a fiduciary duty to act in your best interest.

3. Big Marketing Budget

Coventry Direct dominates satellite radio, TV commercials, and online advertising and spends heavily on marketing — to the extent that it uses one of the four largest marketing agencies in the world.

This marketing budget helps it create a lead-generation juggernaut, bringing in many potential customers every month. Once a Coventry Direct salesperson has you on the phone, his or her goal will be to get you to sell your policy without getting any other quotes. 

4. Fast Closing Process

Coventry Direct has a fast, seamless closing process to help you sell your policy without getting other quotes. The company has the ability to fast-track the closing process and can buy certain policies within a week.

A life insurance broker can get you better offers, but since the broker is shopping your policy around, it will take him or her more time to sell your policy. The more potential buyers the broker shows your policy to, the better the offer you’ll get. Coventry Direct doesn’t need to take time to shop your policy around because it buys your policy directly.

If your goal when selling your life insurance policy is to close as quickly as possible—and speed is more important to you than money—Coventry Direct is probably where you want to go. But if you want to get the most money possible for your policy, you’ll likely get a better offer elsewhere.

5. Transparency Issues

Your Personal Medical Information

Although Beca Life isn’t a broker, we work with brokers, and our experience is that it costs them over $1,000 to properly put the policy on the market. Why? Because a broker has to pay for your medical records and life expectancy report(s). Then, the broker has to invest time in contacting buyers and negotiating the best possible deal. 

Coventry doesn’t have to invest time into shopping your policy because it buys it directly. Like a broker, however, it does pay for your medical records and life expectancy report(s). 

It may surprise you to learn that once Coventry has your personal health information, they will not necessarily share it with you. From a profit perspective, this makes sense. If you had those records, you could take them to another buyer and Coventry would lose a sale. 

Broker Fees

Another transparency issue is the broker fee. Since Coventry Direct isn’t a broker, it doesn’t have to pay a broker fee. At first glance, this looks good. No broker fee means more money for you as the seller, right?

Unfortunately not. In practice, Coventry gives you the lowest possible bid it can. Then the company packages your policy with other policies it bought, prices it for what it’s actually worth, and sells it to the higher bidder. For example, a direct buyer like Coventry could buy 10 policies for a total of $1 million and then sell them as a package on the tertiary market for $5 million. It’s in Coventry’s best financial interest to do so.

By contrast, a broker’s best financial interest is in selling your policy for the highest amount possible. In other words, a seller and broker’s financial interests align.

For example, let’s say a direct buyer like Coventry Direct offers an initial bid of $20,000 for your policy that has a market value of $200,000. A broker would know it has this market value and do his or her best to find a buyer to pay that full $200,000. If the broker’s fee is 20%, that would equal $40,000, and you (the seller) would receive the remaining $160,000.

So by going with a broker, you would have gotten $160,000 instead of the $20,000 had you not contacted another buyer or a broker. 

6. Coventry Does Not Give Their Highest Offer on the First Bid

As we’ve explained, Coventry Direct is a direct buyer. You can think of the company as a house flipper, but instead of flipping houses, it’s flipping policies. The goal is to find deals, then flip and sell them for higher than they purchased them for.

Many buyers are just happy to stop paying premiums on a policy they no longer need, and are happy with whatever Coventry offers.

With that in mind, it makes sense that Coventry wouldn’t give you its highest offer on the first bid. If you dread negotiating, this may be a good thing—especially if you want to sell fast. But if you want the benefits of negotiation, you’ll have to do it yourself with Coventry or find a broker to do it on your behalf.

If you go with Coventry, we recommend getting at least three bids or contacting a broker before submitting the policy to Coventry.

7. Coventry Direct Has Been the Subject of Controversy

Coventry Direct was founded by Alan and Constance Buerger, who made their son Reid the CEO in 2017. Together, the Buergers own many companies and affiliates, which can make its business dealings somewhat opaque. Here’s a brief outline of some issues that have come up with Coventry and/or their affiliates over the years:

Whether Coventry Direct is Right for You Depends on What You Value in a Life Settlements Buyer

Choosing who to sell your life settlement policy to is a big decision. If you value speed over cash, you’ll probably prefer Coventry Direct. Although Coventry likely won’t buy your policy for as much as a broker could offer if you do not get any other bids, it will buy your policy much faster.

On the other hand, if you want the most cash possible for your policy, choose a broker. We can recommend brokers who specialize in your particular circumstances, and we don’t charge you a commission or fee.

Whichever you choose, don’t go to Coventry, and then go to a broker. Many brokers know they can’t compete against Coventry’s speed and sales tactics, so they won’t invest in properly bringing your policy to market.

FAQs

How Does Coventry Direct Work?

Coventry Direct is a direct buyer of life insurance policies. They buy the policy from you and then resell it to other buyers.

Is Coventry Direct Legitimate?

Yes, Coventry Direct is a legitimate company that has been in business for over 40 years.

What Percentage Does Coventry Direct Take?

Coventry does not charge a brokerage fee. It’s hard to pin down what percentage of the true market value Coventry Direct initially offers because it doesn’t disclose these numbers publicly.

What Kind of Company Is Coventry Direct?

Coventry Direct is a life settlements provider and the largest buyer of life insurance policies in the United States.

Does Coventry Direct Buy Term Insurance?

Yes, Coventry Direct buys term life insurance.

Is It a Good Idea to Sell Your Life Insurance Policy?

Selling your life insurance policy can be a good idea if you need cash quickly or no longer want to pay the monthly premiums. However, how you go about selling your policy and whether you work with a broker or a direct buyer will have a big impact on the amount you receive for your policy.

Sell your life insurance policy for cash.

See if you qualify now.

We’re here to help. Speak with a Policy Specialist today at +1 848-456-8333