What is a Life Settlement?

A Life Settlement is a revolutionary financial planning tool that allows senior insureds to sell a life insurance policy to a third-party for an amount greater than the cash surrender value. The sale involves an insured normally age 65 or older, with a policy that is no longer appropriate or affordable, to a third-party investment company which provides the owner of the policy with a lump sum cash settlement.

Why would someone “Sell” their policy?

Policies are sold for many and varying reasons. In many cases, the original purpose or need for the policy has changed or has diminished entirely. A life insurance policy is considered a personal property asset. Like any asset, the owner of the policy has the right to sell their policy to a willing buyer and obtain a present market value for the future death benefit. To get the best deal, policies should only be sold through a professional life settlement broker.

When should a life insurance settlement be considered?

The ability to obtain cash today for a life insurance policy can create many financial planning opportunities. These are some common circumstances leading to a life settlement:

* Death of a Beneficiary
* Sale of a Business
* Dissolution of Partnership
* Divorce
* Premiums no longer affordable
* Change in size of Estate
* Retirement
* Bankruptcy
* Key employee leaving company

What is the Value of a Policy?

The present market value of a policy is determined by the following factors:

    * Premiums required to maintain policy
    * Current cash values or loans, if any
    * Financial status of the insurance company
    * Age and health of the insured
    * Life actuarial tables
    * Current market interest rates

What are the life settlement qualification parameters?

The Insured – Seniors are 65 and up, less if in poor health,

Ownership – The insured, a trust, corporation, or any entity can own the policy.

Policies Considered:

    * Minimum face amount of $50,000
    * Insurance carrier rating – S & P – A
    * Policy is past the contestable 2 year period  (some states require 5 year ownership)

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