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Life Settlements are providing senior consumers with a product that has been long overdue.
It makes sense for seniors to replace non-performing policies and possibly zero-out their premiums with the proceeds from a Life Settlement.
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Case
Summaries:
Jeff Hallman, Senior Executive for Business Development
This case involved an 85 year old female with a $1 million universal life insurance policy. The premium payments were $43,211, and the cash value was $30,625. The client wanted to maintain the same coverage, but needed to lower the annual premium payments. We were successful in getting her a life settlement in the amount of $320,000, which was used toward the purchase of a new $1 million policy with lower premium payments.
Salvaging a policy from surrender or lapse results in windfall. This situation involved a buy-sell agreement where the two partners decided they no longer needed the coverage on one partner, a 79 year old with a $5 million universal life policy. The policy required $250,979 in annual premium payments, and they were just going to let the coverage lapse or surrender the policy for its cash value of $76,493. We were able to obtain a life settlement in the amount of $900,000 -- an amount nearly 12 times greater than the cash surrender value.
Achieving the client's goal: A paid up Life Insurance Policy This case involved a 74 year old female with a $2 million universal life insurance policy with $54,000 in annual premium payment. She no longer needed a high level of insurance coverage and sought reduced coverage with no premium payments. We were successful in receiving three offers. The first offer was $217,000, the second was $225,000, and the third offer, which the client accepted, involved a paid-up life insurance package where the client received a new policy with a guaranteed death benefit of $500,000 with no annual premiums.
Brian Hurley, Account Executive:
This case involved a community organization that owned a $400,000 variable universal life insurance policy gifted 12 years ago by a donor who is currently 82 years old. When premiums on the policy reappeared, the organization had the choice to either accept the cash surrender value of $54,656, or pursue a life settlement. They decided to exercise a life settlement and we were able to more than double the CSV with a life settlement in the amount of $124,000.
Scott Thomas, Account Executive
This situation involved a $9 million universal life survivorship policy on a 91 year old male and 83 year old female. The premium payments were $384,000, and the cash surrender value was $421,000. The client received a life settlement in the amount of $1,160,000 which was used to fund and improve the performance of an existing new policy.
Francis Vela, Account Executive
This case involved a $2 million survivorship policy on an 82 year old female and 81 year old male. The premium payments were $58,720, and the cash surrender value was $277,505. The policy was erroneously set up outside of a trust, which did not solve their estate tax problem. In order to correctly restructure the situation, a new ILIT policy would need to be issued. Therefore, the client chose to do a life settlement on the old policy (as opposed to a 1035 exchange) as the best method to fund the new insurance. We were able to receive a $300,000 offer on the original policy which was used to fund the new insurance.
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Note: Life Settlement amounts are based on numerous factors. The examples and information contained herein are for illustration purposes only and do not necessarily represent future or previous offers, statements, percentages or amounts. Average payout is approximately sixteen (16) percent of the face amount of a qualified life insurance policy. Actual results will vary.
Advanced Settlements, Inc. 2101 Park Center Dr., Suite 220 Orlando, FL 32835 1-800-561-4148 Click on the link to view our Privacy Policy: http://www.advancedsettlements.net/privacy.html This newsletter is intended for insurance and financial services professionals only. Advanced Settlements is a licensed broker or producer in all states where life settlements are regulated, except Kentucky and Montana. Some or all of the proceeds of a life settlement may be taxable under federal or state income tax laws. Advice from a professional tax advisor is recommended. |
Replacement
coverage, same death benefit, but lower annual premiums.
Life
Settlement provides cash for a Community Charity
Life
Settlement proceeds help fund and improve the performance of an existing
new policy 
Proceeds
from life settlement used to set up ILIT