A life settlement is a financial transaction where a life insurance policyholder sells their policy to a third-party buyer in exchange for a lump sum cash payment. This allows the policyholder to access immediate funds—often used for medical expenses, retirement, debt, or other financial needs.

The cash payout from a life settlement is usually higher than the policy’s cash surrender value, but lower than the full death benefit. This makes it a better option than surrendering the policy back to the insurance company. People often consider a life settlement when their financial situation changes, they need cash, or the policy no longer fits their needs.

Once the policy is sold, ownership transfers to the Life Settlements Buyer, who takes over premium payments and becomes the new beneficiary. The buyer—usually a life settlement company or institutional investor—will receive the death benefit when the insured person passes away. Buyers pursue these investments because the death benefit is expected to be greater than the cost of purchasing and maintaining the policy.

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

The life settlement market has grown significantly, drawing interest from investors due to its strong return potential. The process includes evaluating the insured person’s health, reviewing the policy, and determining its market value.

Life Settlement Brokers help guide policyholders through the process, making sure the sale is fair and competitive. As the market continues to evolve, working with knowledgeable professionals ensures you make informed decisions and get the most value from your life insurance asset.

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Policyholder

The original owner of the life insurance policy who sells it.

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Insured

The person whose life is covered by the policy. The insured and policyholder may be the same or different people.

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Buyer (Investor)

The third party that buys the policy, pays the premiums, and gets the death benefit when the insured passes away.

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Broker

A licensed intermediary who helps the policyholder find a buyer and negotiate the sale.

Age and Health Parameters

Life Expectancy (LE) Reports

Medical evaluations estimating the insured’s lifespan, aiding in policy valuation.

Reasons to Consider a Life Settlement for Your Life Insurance

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Changing Financial Needs

Financial priorities shift with age. Selling a policy can provide cash for unexpected expenses or urgent needs.

Lower Monthly Expenses

Unaffordable Premiums

Premiums can increase significantly with age, making it hard to maintain payments. Selling may be better than letting it lapse.

Age and Health Parameters

Terminal Illness

Selling a policy can offer financial relief and peace of mind during a terminal illness.

Policy Types Considered

Decreased Coverage Needs

With age, life insurance needs might decrease. Selling frees up funds for other uses.

Financially Secure Beneficiaries

If beneficiaries are financially stable, policyholders might sell their policy to use the funds during their lifetime.

Transparent Evaluation Process

Retirement Planning

Life settlements can provide extra income for retirement plans.

Evolving Estate Planning

Changing circumstances can alter estate planning needs. Selling a policy provides funds for coverage better suited to current situations.

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Debt Relief

Selling a policy can help pay off debts, easing financial burdens on family members.

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Starting a New Business

Proceeds from selling a policy can fund a new business or investments.

Charitable Giving

Selling a policy allows for significant charitable contributions, impacting chosen causes or organizations.

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
Financial Freedom

Immediate Cash

Provides a lump sum payment that can be used for any purpose, such as medical expenses, debt repayment, or living expenses.

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Higher Value than Surrender

Typically offers a higher payout than the policy’s cash surrender value, which is the amount the policyholder would receive if they surrendered the policy to the insurance company.

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Relief from Premium Payments

The policyholder is relieved of the responsibility to make future premium payments, which can be significant for large policies.

 

Transparent Evaluation Process

Estate Planning

Can be used as a tool in estate planning to provide immediate funds while potentially reducing the taxable estate.

Financial Flexibility

Converts an illiquid asset into liquid cash, providing financial flexibility for the policyholder.

RISKS AND CONSIDERATIONS

Tax Implications

The proceeds from a life settlement may be subject to federal and state taxes. It is advisable to consult a tax professional.

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Loss of Death Benefit

The beneficiaries will no longer receive the policy’s death benefit upon the insured’s death, which could impact financial planning.

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Privacy Concerns

The process requires sharing personal and medical information with third parties.

Regulatory Requirements

Life settlements are regulated transactions, and the policyholder must ensure compliance with state laws and regulations.

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Impact on Public Assistance

Proceeds from a life settlement may affect eligibility for certain public assistance programs, such as Medicaid.

Why use a life settlement broker?

Life Settlement Brokers bring valuable industry experience and deep knowledge, making them well-equipped to handle the complex process of selling a life insurance policy. With their expertise, they help policyholders navigate steps that might otherwise feel overwhelming.

Brokers provide step-by-step guidance, offering insights into market trends, buyer interest, and the overall life settlement landscape. Staying informed about current market conditions can make a big difference in the final offer.

Working with a broker can save time and money. They manage the entire transaction—from paperwork to negotiations—so policyholders can focus on other priorities, especially during stressful times.

Brokers are typically paid through a commission from the final sale, with no upfront costs to the policyholder. This means brokers are motivated to get the highest possible offer, since their success depends on your outcome.

 

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

Because of their established relationships with life settlement providers, brokers can tap into a larger pool of buyers. This increases your chances of getting a competitive offer that fits your specific needs.

As skilled intermediaries, brokers use their negotiation skills to maximize the value of your policy. They know how to present your case effectively—factoring in your age, health condition, and policy face value—so buyers clearly see the policy’s worth.

At Summit Life Settlements, we offer personalized service, expert evaluations, and access to a broad network of buyers. Our team works hard to secure the best possible offer for your policy while ensuring a smooth and transparent process.

Contact Us today to learn how we can help you unlock your life insurance policy’s hidden value. Let Summit be your trusted partner in making smart financial decisions for the future.

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Maximized Financial Return

Competitive Bidding: Brokers connect with multiple buyers, creating competition that can boost the policy’s sale price.
Market Expertise: They know the life settlement market well, securing the best offers.

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Professional Guidance

Expert Advice: Brokers offer advice throughout, helping policyholders navigate complexities and make informed choices.
Regulatory Compliance: They ensure transactions meet regulations, protecting policyholder interests.

Transparent Evaluation Process

Simplified Process

End-to-End Service: Brokers handle everything from valuation to sale, easing the process for policyholders.
Documentation and Paperwork: They manage all paperwork, ensuring accuracy and efficiency.

Access to a Broad Network

Wide Reach: Brokers tap into a broad network of potential buyers, increasing sale success.
Specialized Buyers: They find buyers for specific policy types, like universal or whole life insurance.

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Confidentiality

Brokers protect clients’ privacy, respecting the sensitive nature of these transactions.

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Peace of Mind

Working with a reputable broker ensures the transaction is handled professionally and efficiently, offering peace of mind.

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Ethical Standards

Reputable brokers follow strict ethical standards, ensuring fair treatment and prioritizing clients’ interests.

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No Upfront Costs

Brokers work on a contingency basis, only getting paid when the transaction completes, eliminating upfront costs.

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Regulatory Compliance

Brokers adhere to strict regulations, guaranteeing ethical operation and client peace of mind.

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Handling Legal and Administrative Aspects:

Brokers manage the paperwork and legal requirements, ensuring the transaction is compliant and efficient.

LIFE SETTLEMENT BROKER PROCESS WITHH SUMMIT LIFE SETTLEMENTS

Summit Life Settlement

Initial Consultation and Evaluation

Consultation: The process begins with an initial consultation where the broker gathers information about the policyholder and the policy.
Evaluation: The broker performs a preliminary evaluation to determine if the policy is a good candidate for a life settlement.

Summit Life Settlement

Policy Review and Documentation

Document Collection: The broker collects necessary documents, including the policy, medical records, and any other relevant information.
Review and Analysis: A thorough review and analysis are conducted to assess the policy’s value and potential market interest.

Summit Life Settlement

Marketing and Bidding Process

Marketing: The broker markets the policy to a network of potential buyers.
Bidding: Buyers submit bids, and the broker facilitates a competitive bidding process to maximize the sale price.

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Offer and Negotiation

Offer Presentation: The broker presents the highest offers to the policyholder.
Negotiation: The broker may negotiate with buyers to improve the offers.

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Sale Agreement and Closing

Agreement: Once an offer is accepted, the broker assists in drafting and finalizing the sale agreement.
Closing Process: The closing process includes transferring ownership of the policy and disbursing the funds to the policyholder.

Summit Life Settlement

Overall Time Frame (6-12 weeks)

Total Duration: Through the Summit Life Marketplace, a process that normally takes months can be reduced to weeks. Our aim is to complete the transaction within 6 to 12 weeks. This timeline may vary based on the complexity of the policy, the responsiveness of the buyer, and the efficiency of the documentation.

How Summit life Settlements Can Help?

Working with a life settlement broker is essential if you want to get the best offer for your life insurance policy. These experts understand the complex process and know how to guide you every step of the way.

An experienced broker is familiar with the life settlement market and has access to a network of institutional buyers. This means they can help you receive competitive offers that truly reflect your policy’s value.

Brokers also explain the finer details of the process. They offer valuable insights into market trends, buyer priorities, and other factors that could impact your sale. It’s important to work with a broker who puts your needs first and guides you with honesty, transparency, and professionalism.

With the right broker, you can feel confident navigating the life settlement process and reaching a result that supports your financial goals.

At Summit Life Settlements, we use our secure and efficient Summit Life Marketplace to create demand and maximize your policy’s value. Our platform connects policyholders directly with buyers, streamlining the process and making sure you get the best offer—while we take care of the details.

To help policyholders make smart, informed decisions, our Summit Life Marketplace includes helpful tools like the Life Settlement Evaluator Report. This report compares the potential value of selling your policy and investing the proceeds—along with future premiums—in an index fund, versus keeping the policy for its full death benefit. It’s a simple way to understand your options and choose what’s best for your financial future.

Our team is here to support you from start to finish, offering personalized guidance, expert advice, and clear communication. We want you to feel informed and confident every step of the way. Whether you’re looking to fund retirement, cover medical expenses, or simply improve your financial future, a life settlement could be the right move.

Contact Us today to find out how a life settlement can be a transformative financial solution for you.

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.