Large policies in a book may look and be enticing to a buyer, but do your due diligence, advises Jeff Botosan of HUB Financial and HUB Capital.

"Large policies are earning a lot of renewal commission, therefore there is more exposure."

The exposure risk is that if the policy lapses or if the client decides to change advisors after the block is sold, then that high renewal commission will be lost. To illustrate this point, he gives the hypothetical scenario of one policy that earns $1000 a year in renewal commissions versus 1000 policies earning one dollar in commission. The group of smaller policies allows for more diversified risk and has less exposure.

He adds that, "It is nice to have large policies in a block, but the acquiring advisor should be aware of the risk and do the due diligence." For example, check to see whether the client is likely to continue paying the premiums, or is likely to remain as a client after the sale.