A life settlement is a financial transaction where the owner of a life insurance policy sells it to a third party for a lump sum cash payment. This lets the policyholder get immediate cash, useful for covering medical expenses, retirement, or other financial needs. The settlement amount is generally more than the policy’s cash surrender value but less than its death benefit, offering better value than surrendering the policy back to the insurer.

Ownership transfers to the Buyer, who then pays the premiums. The new owner, often an institutional investor or life settlement company, assumes all future payments and receives the death benefit when the insured person dies. Buyers are motivated by the potential returns, as the death benefit is higher than the cost of purchasing the policy and paying the premiums.

The life settlement market has grown recently, attracting investors due to its high return potential. This process involves evaluating the policy, insured person’s health, and the policy’s market value. Professional intermediaries, like brokers, help ensure a fair transaction.

Life Settlement - Grandmother and grand daughter talking and smiling.Life Settlements Overview

Policyholders may pursue a life settlement due to financial changes, need for liquidity, or dissatisfaction with the policy. Converting an illiquid asset into immediate funds offers financial flexibility.

This process provides financial benefits to both sellers and buyers, making life settlements popular in financial planning. As the market evolves, it offers new opportunities, highlighting the importance of informed decisions and professional guidance in managing life insurance assets effectively.

Reasons to Consider a Life Settlement for Your Life Insurance

Life and Viatical Settlement

Eligibility Criteria:

  • Are over the age of 65.
  • If younger, then must have serious health conditions.
  • Have a life insurance policy with a face value of $100,000 or more.
  • Have held the life insurance policy for a minimum time period usually of two to five years: some states have a time policy requirement and some do not.
  • Ownership and beneficiary status: The policyholder must own the insurance policy and not have any active loans against it.
Life Settlement - Senior couple smiling while posing for a picture. Life and Viatical Settlement Eligibility Criteria

RISKS AND CONSIDERATIONS

Why use a life settlement broker?

Life Settlement Brokers offer extensive knowledge and experience, making them well-equipped to manage the complexities of the process. With years in the industry, they adeptly navigate issues that can overwhelm policyholders. They guide policyholders through each step, providing insights into market trends, offers, and the life settlement landscape. Understanding current market conditions can significantly impact outcomes.

Thanks to their established relationships with providers, brokers can access more prospective buyers, increasing the chances of receiving competitive offers that fit your needs. These connections can lead to better pricing and terms due to the broker’s market credibility.

As intermediaries, brokers use their negotiation skills to secure the best price for the policy. They understand its true value, considering factors such as the policyholder’s age, health, and face value. Effectively communicating this value to buyers maximizes offers, ensuring policyholders receive what their policies are worth.

Life Settlement - Broker explaining to senior couple points that make them happy. HOW CAN SUMMIT LIFE SETTLEMENTS HELP

Partnering with a broker saves policyholders time and money. Brokers handle transactions, from paperwork to negotiations, allowing policyholders to focus on other priorities. This convenience is particularly helpful during challenging times.
Brokers earn a commission from the sale, with no upfront costs for their services. This motivates them to secure the highest offers, aligning their success with client outcomes.

With expertise and dedication, life settlement brokers achieve the best results for policyholders selling their life insurance. If considering this option, working with a reputable broker like Summit is recommended. Our experts provide personalized service and leverage our network to secure the best offer for your policy. Contact us to discover how we can help unlock your policy’s value, ensuring informed decisions for your financial future. Let Summit be your trusted partner in realizing your policy’s potential.

LIFE SETTLEMENT BROKER PROCESS WITHH SUMMIT LIFE SETTLEMENTS

How Summit life Settlements Can Help?

Life settlement refers to the sale of one’s life insurance policy to a third-party for a one-time cash payment. The buyer takes over the premium payments and becomes the beneficiary for when the policyholder passes.

A policyholder must be at least 65 years of age to be eligible for a life settlement.

In order to qualify, one must have a life insurance policy face value with a minimum $100,000 face value.

The face value of a $1 million policy is $1 million.

There are a few cases when the death benefit does not equal the face value, however, usually the death benefit and face value are the same.

The process can vary, but the process can usually take between 6-8 weeks.

If under 65, one can still qualify for a viatical settlement if one suffers from terminal or chronic illness with less than two years of life expectancy.

Yes, some states like Florida do not differentiate between life and viatical settlements and simply refer to all life insurance settlements as viatical settlements regardless of health.

Yes, life settlements are subject to tax gains. In general, one would pay taxes on the difference between what one paid into the policy and what one receives from the settlement.

On average, life settlements payout between 20-25% of the policy’s face value.