Here are some of the most common reasons for a life settlement
LIFEROC helps agents and their clients navigate the life settlement process and works to obtain great offers with our industry leading network of buyers. A life settlement can be a great alternative to a lapsed or surrendered policy and may benefit your clients most when:
1. Selling a Business
A policy bought for a buy-sell agreement may become unnecessary. With the business no longer in the picture, both the need for the policy and the ability to pay for it may have vanished.
2. A Business Owner Retiring
Business Owners frequently acquire a number of life insurance policies in the course of operating their company that may no longer be wanted or needed upon retirement or termination. These include buy-sell or key-person policies, etc.
3. A decline in Estate Value and/or a decrease in Estate Tax Liability
Today’s volatile economy as well as with the increase in estate tax exemptions may reduction the need for life insurance making a life settlement more common.
4. A Term Policy is about to expire
Term policies are among the most likely life settlement prospects to be overlooked. Since term policies generally don’t have any cash surrender value, a life settlement can truly provide “found” money.
5. The Policy is no Longer Affordable
Many policy owners are now being blindsided by increased premium requirements that dramatically exceed what they are able to pay.
6. Terminal or Chronic Illness
While these illnesses would ordinarily be a time when the death benefit of a life insurance policy would seem most imminent, certain illnesses may require very costly medical or custodial care. When all else fails, a life settlement can provide critically needed funds to help pay those expenses.
7. Other: Divorce, Health Care Costs, Under Performing Policy, Need for Cash, Outlived it’s Original Purpose
Life Settlement Qualifications
Policy: Must be at least 2 years old
Death Benefit: $100,000 +
Age: 65 or older
Type of Policy: Term, UL, IUL, SUL, WL, and Variable