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 According to an article published in September 2004 by the National Underwriter, the majority of life insurance policyholders let their policies lapse or surrender the policies for a minimal cash value. According to the article’s author, the wealth lost as a result of these policy surrenders is significant. The National Association of Insurance Commissioners, Kansas City, Mo., estimates that in 1996 for example, nearly $1.5 trillion in life insurance face amount lapsed or was canceled by policyholders. What most policyholders do not know is Life Insurance is a valuable 'assignable asset', which can be sold on the open market just like anything else. |
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So if you don't need that life insurance policy anymore, or if the premium has increased to a point where you can no longer keep paying for it. Don't just cancel it, or cash it in for it's cash value - sell it to the highest bidder! Now seniors have an option to leverage this assignable asset through a 'Life Settlement'.
A Life Settlement is the sale of a life insurance policy in the secondary market, normally through a broker, to a life settlement provider for a cash payment less than the full amount of the death benefit (but for substantially more than the policy surrender value). The transaction involves the policy owner’s transfer of ownership rights to the provider for an agreed amount. The settlement provider then becomes the policy owner, beneficiary, and is responsible for future premium payments.
The Life Settlement gives seniors an exit strategy for life insurance policies they view as too expensive, poor performing, or because it no longer meets their original needs.
Selling one’s life insurance policy as part of a broader financial planning strategy is often a prudent financial decision for high net worth seniors, facing changing life circumstances. Proceeds are often used by the seller to buy a more cost effective life insurance policy or annuity, purchase long term care insurance, provide cash gifts to family members, invest in a new business, etc.
When to consider a Life Settlement:
- When the insured is 70 years of age or older
- When a policy is lapsing or being surrendered
- When the current life policy is too expensive
- When there is a need for new life insurance, annuities, or long term care
- When the insured has outlived the beneficiaries
- When there is an estate tax change and life insurance is no longer needed
- When policy premiums are no longer affordable
- When there is a change in the health status of the insured
- When there is a retiring Key-Man or life insurance to fund a Buy Sale Agreement, which is no longer needed
- When there is a liquidation of assets due to bankruptcy
How does a Life Settlement work?
- A policy evaluation form is submitted with a signed authorization
- We will will obtain all other necessary documentation such as attending physician’s statements, policy illustrations, etc.)
- A Life Settlement offer is submitted for acceptance (if applicable)
- Once accepted, the contract is sent for signatures
- Change of ownership is completed and funds are released to previous owner
Kelley Insurance & Financial has developed the right relationships with National Leaders in the Life Settlement marketplace. We have been providing these services since the inception of the industry in 1998. We are dedicated to offering policy owners the highest levels of service and integrity. Our network of Funding partners coupled with our volume, and competitive bidding process, will help achieve the fair market value for your life insurance policy.
What to do if you are interested in exploring a Life Settlement?
Seniors interested in knowing whether they qualify for a Life Settlement may call one of our Life Settlement representatives at 1-202-244-8198. We will be happy to discuss your personal circumstance and determine whether you qualify.
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