In this episode of 60 Plus Uncensored, Seb Frey sits down with Carol Sue Fiedler, founder and managing director of Innovative Settlements, and the very first licensed viatical settlement broker in the U.S. For decades, Carol Sue has been a fierce advocate for policyholders, ensuring they get the highest possible value for their life insurance policies. Her story blends compassion, business savvy, and a Bronx-born refusal to let people get taken advantage of.
From Bronx Roots to San Francisco Dreams
Carol Sue grew up in the Bronx in a close-knit community where neighbors looked out for each other, a value that still drives her work. After a successful real estate career in New York, she moved to San Francisco in 1990 with little more than her cat, Magic, and a dream.
Though she considered working in Bay Area real estate, she didn’t want to start over at the bottom. Instead, an unusual help-wanted ad led her into the world of insurance sales, and soon after, into the nascent viatical settlement industry.
The Birth of the Viatical Settlement Industry
In the early 1990s, AIDS devastated communities, and many were told they had six months to live. For people with life insurance, their policies became lifelines when it was discovered they could be sold to private investors for cash.
- Viatical settlements allow terminally ill individuals (life expectancy ≤ 24 months) to sell their life insurance for immediate funds, tax-free.
- Buyers pay less than the full death benefit but assume responsibility for premiums and later collect the payout.
Carol Sue quickly noticed predatory practices: some companies consistently lowballed sellers, offering the same $10,000 no matter the policy size. Outraged, she founded her own brokerage in the early ’90s to fight for fairness and transparency.
Life Settlements: Expanding the Market
By the late 1990s, medical advances made AIDS manageable, and investors wanted to expand the market. Enter life settlements:
- Life settlements allow older policyholders (often over 65, not terminally ill) to sell policies they no longer need or can’t afford.
- Payouts are taxable and typically smaller percentages (often 12–30% of face value), but still better than letting policies lapse.
Carol Sue highlights that 90% of life insurance policies lapse, meaning people pay for decades and then walk away with nothing. Life settlements give them a new option.
If you want a step-by-step breakdown of how this process works, don’t miss Cashing Out Your Life Insurance Policy: A Complete Guide.
Accelerated Death Benefits (ADB): The Insurance Industry Responds
To compete with settlements, insurance companies introduced accelerated death benefits (ADB), allowing policyholders with terminal diagnoses to collect part of their death benefit early.
- ADBs are usually more restrictive (e.g., requiring life expectancy ≤ 6–12 months).
- Payouts may be capped (e.g., $125,000 on a $500,000 policy).
- Carol Sue always compares ADBs vs. settlements for clients to ensure they get the best deal.
How Negotiations Work
Carol Sue’s process is both strategic and competitive:
- Gather medical records and policy details.
- Send cases to multiple licensed providers.
- Providers shop policies to their investors and return bids.
- Carol Sue negotiates offers against each other to drive up the payout.
- Timeline: Viatical settlements (urgent cases) can close in ~2 months; life settlements often take 2–4 months.
- Payouts: Typically 12–30% of the face value, depending on age, health, and premiums.
- Example: A healthy 87-year-old with a $500,000 policy might get around $100,000 (20%), taxable depending on cost basis.
Her favorite part? The bidding wars where she fights tooth and nail for clients.
Advocacy and Ethics
Unlike many brokers who funnel policies to a single buyer, Carol Sue insists on true competition. She stresses:
- Never accept the first offer.
- Always research companies and brokers.
- Beware of scams, if it sounds too good to be true, it is.
- Clients should never be pressured into selling.
For viatical clients, Carol Sue often goes beyond the transaction, staying in touch to offer support and encouragement, bringing, as she says, her “little Jewish mother” energy into the mix.
Protecting yourself goes beyond financial decisions — it also means guarding against fraud. For a deeper dive, read How to Prevent and Recover from Identity Theft: A Complete Guide for Adults.
Lessons for Anyone Facing Financial Decisions
Carol Sue’s career offers broader wisdom:
- Do your homework. Read contracts carefully, ask questions, and get second opinions.
- Explore all options. Sometimes keeping the policy, taking the cash value, or even a reverse mortgage might be better.
- Protect yourself. Only work with licensed professionals and established firms.
Curious about whether a reverse mortgage might fit your situation? See A Quick Guide on Reverse Mortgages for Seasoned Homeowners.https://teamsixtyplus.com/a-quick-guide-on-reverse-mortgages-for-seasoned-homeowners/
Another financial option many consider is tapping into their home’s value. Learn more in Unlocking Home Equity for Seniors: How Older Adults Can Thrive Financially.
How to Reach Carol Sue Feedler
- Email: innovativesettlements@gmail.com
- Website: innovativesettlements.com
- Phone: 415-925-1175
- Location: Based in California, but licensed (directly or through partners) to work nationwide.
Conclusion
Carol Sue Fiedler helped shape an entire industry, one that now provides billions in payouts to policyholders who would otherwise walk away with nothing. Her blend of Bronx grit, San Francisco openness, and relentless integrity has set a standard for ethical advocacy.
Beyond life insurance, there are many underused resources available to older adults. Check out Are You Missing Out on These Senior Benefits?.
Her message is clear: your life insurance is an asset, know its value, protect your interests, and never settle for less than you deserve.