Senior Life Settlements
A life settlement is the sale of a life insurance policy (or settlement) by the owner/insured of the policy for less than the face value of the policy, but more than its surrender value.
Typically, life insurance policies are purchased from seniors or companies with policies on key-man executives. Unlike most other nations, the Supreme Court has ruled that a US life insurance policy is a financial asset, just like real estate property, stocks, or any other investment. This ruling has created a newly formed and rapidly growing secondary market for unwanted or unneeded life insurance policies which were long thought to be a non-liquid asset. Now, the policy owner can get cash quickly from this asset while alive to enjoy it. The transaction as a whole is a “win-win” situation for the seller who gets value in the form of cash and the buyer acquires a valuable asset.
What is a life settlement?
A life settlement is the sale of an existing life insurance policy to a third party for more than its surrender value but less than its net death benefit.
Are life settlements legal?
Yes. A Supreme Court decision in 1911 determined that a life insurance policy is private property and can be sold at the will of the owner.
Why sell a life policy?
- Policy is no longer needed or wanted
- Premium payments have become unaffordable
- Estate planning needs have changed
- Business buy-sell agreement or keyexecutive has changed
Who qualifies?
Seniors 75 years of age or older with permanent or term life insurance policy of $100,000 or more.
What are the benefits?
- Provides a superior exit strategy for unwanted policies; i.e., can provide insured many times more the cash surrender value
- Provides value to a hidden asset that otherwise might be allowed to lapse
- Provides freedom allowing sale proceeds to be spent with no restrictions
- Provides means to effectively address life changes
How does it work?
- Insured completes a short questionnaire and provides medical record release and policy information authorization.
- Information including medical records are sent to funding companies who determine policy value and submit bids.
- Highest bid is forwarded to the insured for acceptance.
- Once the offer is accepted, closing documents are prepared and insurance carrier notified of changes.
- Upon verification of the changes, funds are transferred to the seller.
Who buys life settlements?
Large financial institutions buy portfolios of 300 or more policies so no one policy is of significant value. Buyers include JP morgan, Credit Suisse, and Deutsche Bank. Berkshire hathaway (Warren Buffet’s company) recently bought a portfolio of policies worth $1 billion.
What is the market?
Thousands of seniors sold their no longer needed or wanted life insurance policies (face value of over $8,000,000,000) in 2010 and the demand is growing rapidly. Recent study concludes market of $50,000,000,000 face value by 2020.
How do I get started?
To learn more about life settlements and determine if it is right for you, talk to one
of our specialists. It will cost you nothing to find out if a life settlement will work for you. there is absolutely no risk or obligation to this program.
Call toll free at (877) 261-0632
To download Bonded Life Company’s Senior Life Settlements Brochure that contains all the information listed above, please click here.
