This life settlement story almost wouldn’t be believable, if it weren’t true. Luckily for this family, this real life example is not only true, but unparalleled in Settlement Benefits’ history dating back to 2002. This story excellently demonstrates how all the many pieces of a Life Settlement puzzle must be coordinated to best benefit each policy owner and his/her family.
The first puzzle piece here was the financial professional who had not written the life insurance policy, but rather was approached by the husband whose wife was dealing with a stage 4 cancer diagnosis. Immediately, the financial professional recognized that this family would need financial support and guidance. After a thorough review of expenses, assets and options, it became obvious that financial assistance in some form was going to be necessary.
The next step in the review process identified a $500,000 term life insurance policy on the husband as an asset. And, while he wasn’t the medically impaired individual, the policy was brought to Settlement Benefits to determine the fair value. With such dire financial circumstances, the challenge was to be thorough and find any options available to this family.
To the delight of everyone involved, Settlement Benefits discovered that an unknown spousal rider was available on the policy. This would allow the wife to be covered in case of death, too. What happened next was very special. The expert underwriting team at Settlement Benefits was able to uncover a pair of rare stipulations that actually allowed the rider to be converted to its own policy and allowed the death benefit to double if converted properly.
Clearly, this was the break the family needed, as a $1,000,000 policy on the terminally ill wife would be worth far more than a $500,000 term policy on the healthy husband. So, great care was taken to properly execute the chain of events necessary to create this situation. The experience gained by reviewing thousands of policies at Settlement Benefits was put to use to benefit this family. The puzzle pieces were in place for a successful outcome.
However, finding and creating this opportunity wouldn’t be enough by itself. The policy would need to be sold quickly to deliver the needed funds to the family. That’s where Settlement Benefits advanced operations played a tremendous dividend. Because the family had utilized the the online guided application to begin the appraisal process, the necessary proprietary HIPAA forms and third party authorizations were correct and complete from day one of the life settlement process. This can save weeks of processing time and played a tremendous role in the success of this scenario.
Next up was the need to negotiate the top price for this newly-created policy. This played into Settlement Benefits strength in the secondary market. Years of negotiating with all licensed buyers illuminated the nuances necessary to negotiate such a complicated case. Multiple rounds of bidding were conducted to drive the price from an initial bid of $300,000 all the way to $565,000 for the client. Amazingly, this payoff amount exceeded the initial death benefit brought forward by the client. The family was so thankful to accept this offer and proceeded with the closing.
The closing portion of this process afforded Settlement Benefits another chance to shine. Despite being notified by the carrier that change forms would take 30 business days to execute, the professionally honed expediting process used by Settlement Benefits was able to reduce that to just 4 calendar days, meaning the client received funds almost a month earlier than expected.
As you can imagine, finding a $500,000 policy and turning it into $565,000 of cash was a life changing event for this family deeply in need of a financial solution. The funds have been used to further medical treatment and prepare for the family’s future financial needs. This was truly a unparalleled outcome for the family, the financial professional, and the broker.