LIFE SETTLEMENT EXAMPLES

Jim, who owned a $500k policy with a life expectancy of 7-9 years, managed to negotiate an offer of $40k on his own. Unsatisfied with this amount, he went through the broker process to get multiple offers for his policy. In the first round, he received an offer for $100k, and through competitive bidding, ultimately raised the settlement to $200k. Jim received five times the amount he would have gotten had he accepted his initial direct offer. Clearly, the initial buyer aimed to purchase the policy at the lowest possible price due to a lack of competition. This example underscores the significant value of hiring a life settlement broker.

June, age 73, holds a $750k universal life insurance policy with annual premiums of $30k. She receives an offer of $80k, based on a life expectancy of another 12 years. If she retains the policy, she is likely to spend an additional $360k in premiums. Conversely, selling the policy provides him with $80k immediately and saves him $30k annually, culminating in a total of $440k from the settlement and future premium savings. Determining that her money could be better invested elsewhere, Mrs. Roberts opts to accept the offer.

Martha, at 91 years old, holds a $1,000,000 universal life insurance policy with a monthly premium of $4,000. Over the years, these premiums increased annually, gradually becoming a significant financial burden. Martha, who had always been diligent about her finances, decided it was time to seek alternatives to ease this financial strain. She explored her options diligently and received multiple offers from different providers. After careful consideration and negotiation, she ultimately boosted her settlement to $410,000, which was more than four times the initial offer from her original provider. This decision provided her with much-needed financial relief and peace of mind.

James, age 92, holds a $1.75 million whole life policy with annual premiums of $100k, which he can no longer afford. Despite being in relatively good health and expected to live to 100 or beyond, he faces a financial dilemma. He receives offers up to $800k to sell the policy but opts for $750k with a retained death benefit option. This option allows his beneficiaries to receive an additional death benefit that decreases each year as the investor covers more premiums. Should James pass away within the next year, his beneficiaries will nearly receive the remaining death benefit.

​​Frank, age 69, holds a $500,000 convertible term policy that is due to expire later this year. He is considering converting this policy to a permanent plan with the intention of selling it in a life settlement. The premiums for the new plan will amount to $20,000 annually. Given Frank’s relatively good health, he receives offers of up to $50,000, which he gladly accepts rather than letting the term policy expire without value.

Jim, 58, purchased a $500,000 whole life insurance policy 21 years ago. Intrigued by a commercial for life settlements, he wanted to see if he could sell his policy to gain some immediate financial benefit. Despite his efforts, Jim found that with no significant health issues and still being relatively young in his late 50s, there was little interest from investors. Understanding that he might get better offers in the future if his health status changed or as he aged, Jim decided to wait for a better opportunity.

Robert, a 77-year-old man diagnosed with a serious medical condition, has a life expectancy of 2-3 years. He holds a life insurance policy with a $1.2 million death benefit, but there is no remaining cash value in the policy. Given his shortened life expectancy, he receives multiple offers from potential buyers, with the highest offer being up to $850,000. These offers provide him with an opportunity to gain significant financial support during his remaining years.

Cindy, age 78, held a $1,000,000 whole life insurance policy. Confronted with escalating cancer treatment expenses, she urgently required financial assistance. After considering her options, Cindy chose to cash out her policy via a viatical settlement, a solution tailored for policyholders with terminal illnesses. This decision enabled her to receive $710,000, 71% of the policy’s face value, offering her the essential funds to cover medical costs and enhance her quality of life during treatment.

Maria, with a $1 million universal life insurance policy and a life expectancy of 6 years, was approached directly by a buyer offering her $60,000 for herpolicy. Initially tempted to accept the offer, she decided to consult with a licensed life settlement broker first. Once her case was presented to a competitive pool of institutional buyers, Maria ultimately secured a settlement of $310,000—more than five times the original offer. Had Maria sold directly, she would have left over $250,000 on the table. This case illustrates the hidden value of structured competition and the importance of professional representation in the life settlement market.