What is a life settlement?
A life settlement is the sale of an existing life insurance policy for more than the policy’s cash value but less than the death benefit.
It is estimated that more than $700 billion of life insurance is surrendered or permitted to lapse each year – over $100 billion of which is by seniors. Further, nearly 90% of all Universal Life policies never result in a death claim.
On average, life settlements provide more than four times the policy’s cash surrender value in addition to decreased monthly expenditures for policy premiums.
Why would I sell my life insurance policy?
There are many reasons policy owners pursue life settlements. Some of the more common reasons include:
- The original purpose for the policy no longer exists.
- Estate, business, or financial needs have changed.
- Liquidity is needed.
- Premium payments have become unaffordable
Who qualifies?
- Insureds 60 years or older living in the United States.
- Younger insureds with health impairments or terminal conditions may also qualify
- Any policy type with a death benefit of $100k or greater and issued by a U.S. carrier may qualify
- There is no minimum or maximum life expectancy.
How can I use the proceeds?
There are no restrictions on how the proceeds of a life settlement can be used. Some common uses are:
- Investments and financial planning
- Cover medical or long-term care costs.
- Fund a better retirement.
- Generate liquidity for large purchases or travel.
- Provide immediate financial support for their family.
To learn more, reach out to Marc Blatt, Legacy Trust & Capital Partners’ head of insurance, or go to legacytcp.com/contact
Marc Blatt • mblatt@legacytcp.com • (201) 277-2100