text size
Life Settlements offer a unique opportunity both to the policyholder and their advisors.
As circumstances change, the ability to obtain cash from the sale of a life insurance policy can be particularly valuable. The majority of Life Settlement transactions are entered into for the purpose of purchasing other insurance and financial products. Life Settlement proceeds are unrestricted and can be used to fulfill a wide range of financial and estate planning objectives for your client. The Life Settlement amount is determined by such factors as policy parameters, age, and health of the insured.
As the market for Life Settlements has grown, so too, have the reasons for seeking a Life Settlement. Below is a simple summary of some of the most common reasons a policyowner may wish to obtain a Life Settlement:
Life Insurance Needs
- Premiums too costly
- Term policy about to expire
- Significant change to the value of the estate and/or estate tax laws
- Beneficiaries no longer living
- Debts have been eliminated
- Replacement policy is desired (with reduced premiums, different coverage or both)
Business Insurance Needs
- Business has been sold or liquidated and buy/sell funding no longer needed
- Insured no longer a “key” employee and Key Person protection no longer needed
- Policies no longer needed to fund deferred compensation packages
- Funds required to buy out partner’s interest
Financial Priorities
- Make gifts to family members while still living
- Make gifts to charities while still living
- Make other investments
- Purchase a vacation or retirement home
- Proceeds necessary for long-term care or other medical needs