What are Life
A financial tool used by senior policy owners and financial advisors applied
to life insurance creating money in excess of cash surrender value.
Life Settlements, also known
as a senior settlement or viatical settlement, give a policy owner a cash
settlement in excess of (sometimes double or even triple) their current cash
You can now turn that poor
performing life policy into a significant financial asset.
The majority of life
settlements transactions are entered into for the purpose of purchasing other
valuable insurance and financial products. (i.e. annuities, LTC, current
generation life products.)
Life settlements also
present insured individuals with a more desirable alternative to:
- A 1035 exchange
- Surrendering a life
- Letting a life
Life settlements are the
opportunity to provide a highly profitable alternative to those who are over
age 65, or any age living with a serious illness. Financial professionals all
across the country are building a significant profit center by offering their
clients life settlements. This can be done without altering your focus or
changing your current business plan.
Financial and estate planning
needs are constantly changing and the demand for more flexible financial tools
is evident and quickly increasing. A life settlement can help you meet these
challenges with great monetary benefits to you.
Why would someone consider Life
- Reduce or Eliminate Life Insurance Premiums
- Create more comfortable retirement years
- Fund new needed Annuities, Life Insurance, Long-Term Care or Investments
- Fund the purchase of a needed survivorship policy
- Settle personal or business debts proactively
- Bestow cash gifts to family members or charities
- Boost cash flow with the elimination of future premiums
- Maintain a lifestyle despite changes in finances or health
- Activate income from an inactive asset
- A more profitable alternative than surrender or lapse
What types of policies are
considered for Life Settlements?
Almost any type of life insurance…
- Universal life
- Whole life
- Key-man Insurance
- An individual
- Charitable organization
How much will I receive for my policy?
There are many factors that determine the Life Settlements offer amounts:
- Client's health
- Type of policy
- Insurance company rating
- Policy size
- Competitive bidding
As a general rule: age, health and future premiums are the primary factors
that determine the amount of the Life Settlement offer.
Who makes the remaining premium payments?
The funding institution will pay all future premiums after the Life Settlement
Are there any restrictions with the proceeds from Life
Life Settlements proceeds are unrestricted and can be used in any way you
How long does it take
for Life Settlements?
The offer process generally takes four to six weeks. If you accept the offer, you
normally see payment within one month - approximately six weeks total from the
time of qualification to receipt of proceeds.
Is there any obligation?
There is no obligation to accept Life Settlements' offers.
What if I change my mind?
There is never a cost or obligation for applying for Life
Settlements, nor an obligation to accept any Life Settlement Offer presented to
you. Every Life Settlement transaction has a 15-day rescission period. As the
previous policy owner, you can change your mind and get the policy transferred
back to you within fifteen days after receiving your funds.
Are the proceeds taxable?
As with all financial decisions, you should consult a professional tax
advisor. In general, Life Settlements proceeds are:
- Tax free up to the amount invested (Premium Payments)
- As ordinary income up to cash surrender value
- And as capital gains above cash surrender value