LIFE SETTLEMENT FAQs
How do you sell a life insurance policy?
Work with a licensed life settlement broker to appraise, prepare, and present your policy to large number of investors to find the highest bidder. If you decide to select a bid, the deal goes into escrow, and ultimately closes with the 3rd party investor taking ownership of your policy in exchange for a cash settlement that is valued higher than the cash value in the policy and lower than the death benefit.
What is a life settlement?
A life settlement is the term used for when a life insurance policy owner transfers ownership to a 3rd party investor in exchange for a cash settlement. Eligible policies include Universal Life, Whole Life, and Convertible Term policies, and the insured is at least 60 years old, or is given a short life expectancy.
What is a viatical settlement?
A viatical settlement is a type of life settlement for someone who is given 24 months or less to live, or is currently in a long term care situation and requires funds to pay long term care expenses. The life insurance policy owner may sell their life insurance policy to a 3rd party in exchange for a cash settlement valued greater than policy’s cash surrender value and less than the death benefit.
How do life settlements work?
When a life insurance policy owner decides to consider selling their policy to a 3rd party investor, they begin by working with a life settlement broker to complete an application and go through the underwriting process. When complete, the life settlement brokerage then presents the opportunity to large number of investors in search of the highest bid. If the policy owner decides to accept a bid, the deal goes into escrow, and ends with a cash settlement in exchange for the transfer of ownership of your policy to the 3rd party. The 3rd party then continues paying the premium, and will collect the death benefit when the insured dies.
How does a life settlement calculator work?
To calculate the value of a life insurance policy to a 3rd party investor, there are a number important factors to consider including the cash value (if any), the cost of premiums, the death benefit, and the life expectancy of the insured. Start with an informal appraisal to see if you qualify and get an idea on the approximate value.
What are life settlements?
A life settlement is the transfer of ownership of a life insurance policy to a 3rd party in exchange for a cash settlement. The 3rd party takes over premium payments, and collects the death benefit when the insured dies.
Who are life settlement providers?
Life settlement providers represent large investment fund companies in the transaction of life insurance policies.
Who buys life insurance policies?
A wide variety of investment firms, hedge funds, and various fund companies buy life insurance policies as alternative investments. Work with a licensed life settlement broker to apply for a life settlement and have your case presented to as many investors as possible.
What is a life settlement appraisal?
A life settlement appraisal is an approximate value of your life insurance policy if you were to sell it. Actual bids may come in higher or lower than the appraisal depending on the current market desires for your type of opportunity.
How to sell a life insurance policy?
Find a licensed life settlement broker to review your policy and health details. Life Settlement Option can help. If you qualify, your broker will have you apply and begin underwriting to prepare your case. When ready, they will bring the opportunity to market and get it in front of as many buyers as possible. Once bids are in, the policy owner selects a bid, and the deal goes into escrow. If everything looks good, escrow closes with a lump sum cash payout and ownership of the policy transfers to the 3rd party.
What is a life insurance settlement?
A life insurance settlement, known as a life settlement, is the transfer of ownership of a life insurance policy to a 3rd party in exchange for a cash settlement. To qualify, the insured must be at least age 60, or has a life expectancy of less than 2 years.
What are viatical settlements?
When the insured of a life insurance policy is given 24 months or less to live, they qualify for a viatical settlement, allowing them to sell their insurance policy to a 3rd party investor in exchange for a cash settlement. For policies where the insured is not terminally ill and is at least 60 years old, they can still sell their policy in what is known as a life settlement. Life settlement is a term that refers to both viatical settlements and senior settlements.
What are life insurance settlement options?
When a life insurance policy owner is having trouble making their premium payments, or no longer has a need for the life insurance policy, they have several options to consider: One option is to sell the policy to a 3rd party investor with a life settlement. Other options to consider are surrendering the policy for the cash value, or letting the policy lapse.