Policy Evaluation

Who May Qualify For A Life Settlement?

The following criteria are typically required for successful life settlement transactions:
  • The policy has a face amount of $100,000 or more
  • The insured is a 70+ year old male or a 75+ year old female (Younger clients may be considered if there has been a significant change in their medical condition since the policy was originally purchased.)
  • A policy that is beyond the period of contestability (in most states, in-force for at least 2 years)
  • The annual premium payments are no more than 5% of the death benefit
  • The cash surrender value is no more than 25% of the death benefit

Types Of Policies Eligible For A Life Settlement

  • Universal Life
  • Whole Life
  • Term (must be convertible)
  • Variable Life
  • Joint
  • Key Person

How Much Will Be Received For A Policy?

Factors that typically determine the offer amounts:
  • Age of the Insured
  • Amount of Premium Payments
  • Insured’s health
  • Type of policy
  • Insurance company rating
  • Policy size
  • Amount of cash value in the policy
  • Competitive bidding
  • State of residence
  • Policy loans (if any)

Benefits To The Client

A Life Settlement can provide the policy owner with one or more of the following benefits:
  • Provides liquidity
  • Can fund alternative product purchases to fit current needs
  • Provides relief from premium expenses
  • A more profitable alternative than surrender or lapse in most instances
  • Settle business or personal debts proactively
  • Bestow cash gifts to family members or to charities
  • Maintain a lifestyle despite changes in finances or health
  • Activate income from an inactive asset
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