Life Insurance Settlements
Do you have a life insurance policy you no longer want or need? If so, we can help you sell yours for the best possible value. This process is called, “Life Insurance Settlement.”
What Is A Life Settlement?
• A life settlement is the sale of an existing life insurance policy on the secondary market to a third party for fair market value.
• The owner sells the policy in exchange for a lump sum settlement that can be higher than the cash surrender value.
• The third party institutional investor becomes the owner of the policy, makes premium payments, and collects the death benefit at the insured’s death.
• With institutional investors, policies are owned in large blind trusts with other policies. This can help to assure client confidentiality.
Possible Life Settlement Candidates
• Individuals age 70 and older.
• Life expectancy of 14 years or less.
• Decline in health from original policy issue.
• Life insurance policies with a net death benefit of $250,000 or more (no maximum).
• Policy type: Universal Life, Guaranteed Universal Life, Survivorship Universal Life, Variable Universal Life and Convertible Term (sometimes ,Whole Life).
• Owner can be an Individual, Trust, or Corporation.
• Premium should be 5% of the Death Benefit (or less) and Cash Surrender Value should be 15% of Death Benefit (or less).
Reasons Why You May Want To Settle Your Policy
• Insurance is no longer needed and you would like to sell the policy for a lump sum cash payment.
• Term policy is nearing the end of a term period. You can convert to a permanent product and receive, through a life settlement, proceeds for an asset that will terminate if not converted.
• Business is sold or changes are made that result in insurance no longer being needed.
• Policies held within a trust are no longer meeting the original trust plan objectives.
• Funds are required to focus on personal needs such retirement, long-term care insurance, or family emergencies.
To learn more about what Life Insurance Settlements are and how the Life Insurance Settlement Process works, watch the video below.
Below are just a few of the life settlements-related problems we’ve been able to solve for clients. Click the silver bar for each problem to learn more about how we can solve them.
Unwanted Premium Payments
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Continuing to pay premiums for a life insurance policy that is no longer needed can be a financial burden. Life insurance settlements allow you to receive a lump sum payment, eliminating the need for ongoing premium payments and freeing up cash for other uses. |
Immediate Financial Needs
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Policy holders may face unexpected expenses or financial challenges requiring immediate cash. Life insurance settlements provide a way to convert an illiquid asset into cash, offering a financial lifeline to cover medical bills, debt repayment, or other urgent needs. |
Underperforming Policies
Some life insurance policies may not perform as expected, with lower-than-anticipated cash value growth or dividends. Settling such policies can provide you with a better return than surrendering the policy or continuing with an underperforming asset.
Changing Financial Goals
As your financial situations and goals change, your need for life insurance may diminish. Life insurance settlements offer your an opportunity to reallocate funds into more suitable investments or financial vehicles that may better align with your current objectives.
Estate Planning Adjustments
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Changes in estate planning strategies or tax laws may reduce your need for life insurance coverage. Settling a life insurance policy can help to streamline your estate plans and reduce the complexity of your financial affairs, potentially providing additional funds for other estate planning purposes. |
Ready to learn more about how Life Insurance Settlements may help you?
If you’re interested in working with us, you may call and text us at (781) 237-0123, or scroll down a little and schedule an introductory appointment with a financial advisor by clicking on a date that works for you on the calendar.
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Life Settlements Disclosure
Valmark Securities supervises all life settlements like a security transaction and its’ registered representatives act as brokers on the transaction and may receive a fee from the purchaser. Once a policy is transferred, the policy owner has no control over subsequent transfers and may be required to disclosure additional information later. If a continued need for coverage exists, the policy owner should consider the availability, adequacy and cost of the comparable coverage. A life settlement transaction may require an extended period to complete and result in higher costs and fees due to their complexity. Policy owners considering the need for cash should consider other less costly alternatives. A life settlement may affect the insured’s ability to obtain insurance in the future and the seller’s eligibility for certain public assistance programs. When an individual decides to sell their policy, they must provide complete access to their medical history, and other personal information.