Life Settlement Examples

The first thing people want to know when looking into a life settlement is how much their policy is worth.  Many are hoping to find a simple life settlement calculator  but because there are so many variables to every policy and individual, the best we can do as an informal appraisal.

 

If you're not quite sure about getting an appraisal just yet, you can review some examples of life settlements to help get a feel for life settlement values:

  • Dr. T is a 95 year old male with some health issues, but nothing significant that suggests he won't make to at least 100.  He has a universal life policy with no cash value left, and a death benefit of $950,000.  The cost of insurance is now $40k a year to keep it going, and he has decided to do a life settlement instead of paying the future premiums for years to come.  Due to his age, he receives multiple offers and the highest offer is $570k, which he gladly accepts.

  • Mrs. H is an 82 year old female with no major health issues and a $3MM universal life insurance policy.  Her premiums are now $142k a year to keep the policy in force.  Because she could easily live another 10 years, she has decided she can't afford to keep up the premiums at that level, and accepted a $300k settlement instead of losing everything.  She is happy to invest the money elsewhere.  

  • Mrs. V is 77 and has a $100k universal life policy with premiums increasing each year, averaging about $6k a year for the next 5 years.  Despite having a heart attack in the past, her life expectancy is still 7-8 years, and because her premiums are fairly expensive, she receives an offer of $9K.  If she keeps it she'll pay another $6k in premiums instead of receiving $9K, which ultimately makes it a $15k difference in her savings account.  She decides she no longer wants to keep paying the premiums and sells it.  

 

  • Mrs. M is a 75 year old female with stage 4 cancer and has been given a 2-3 years life expectancy.  Her universal life policy has a death benefit of $750,000 and has no cash value left in it.  The premiums are expensive, as are her medical bills.  Due to her diagnosis she is able to get a lot of offers and receives an offer of $500k.

  • Mr. B is a healthy 82 year old male with a $250k convertible term policy that covers him to age 95.  He looks into doing a life settlement, but learns that the conversion deadline was in 2007 and it's now 2019.  Because he is not terminally ill, even though his term covers him to age 95, the rising cost of insurance is too expensive for any investors to consider.  He is unable to do a life settlement.    

  • Mr. C is a healthy 75 year old male with a $500,000 universal life policy and very little cash value left in it.  He has no significant health issues, but can no longer afford the premiums.  He is able to get $30k for it, and is happy to get out from under the premium payments while he still has other assets to leave his children.   

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  • Mrs. S is a fairly healthy 71 year old female with a $500k convertible term policy that expires in 6 months.  The investor is able to convert the policy to a universal life policy, and due to her health and age she is able to receive a gross offer of $12,000.  She does not intend on converting the policy herself, so while this is not a large amount, it is still much better than receiving nothing.

  • Mrs. H is 74, healthy, and has a whole life policy worth $150,000.  Her cash value has accumulated to $130,000.  She no longer has a need for the life insurance policy and looks into doing a life settlement.  Because her cash value is so close to the death benefit, her best option is to simply take the surrender cash value amount and there is no need to do a life settlement.