How Long Does a Life Settlement Take?

May 14, 2024 | By Adam Lippman

How Long Does a Life Settlement Take?

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A Life Settlement may take six to eight weeks and be affected by numerous factors. These factors include the buyer, the state, and the insurance carriers the insured selects. 

Factors Impacting Life Settlement Payout

The length of the Life Settlement process varies. Here are estimated timelines the insured can expect:

  • Medical records:¬†The insured may wait one to five weeks for records from their medical service provider.
  • Analysis:¬†The¬†valuation of the¬†insured‚Äôs policy¬†and sourcing prospective buyers takes one to two weeks.¬†
  • Case presentation:¬†A¬†reputable Life Settlement brokerage¬†may take up to a week to strategize how to present the insured‚Äôs policy to prospective buyers.¬†
  • Offer:¬†The brokerage provides the best offer to the insured. The review and decision typically take a week.¬†
  • Contract delivery and signing:¬†Contract delivery, signing, and returning signed documents take an additional week.¬†¬†
  • Additional review:¬†The escrow facility and Life Settlement brokerage do a final, one-week review of the closing package.¬†
  • Final collections:¬†Any outstanding documents may take up to a week to collect.
  • Ownership and beneficiary change:¬†Once everything is in order, the beneficiary and change of ownership process may take up to 30 days, depending on the insurance carrier.
  • Settlement:¬†When the ownership change is complete, cash payment takes one to two days.

Life Insurance Selling Process

When working with professionals like Settlement Benefits Association, the process of Life Settlement is handled in three steps:

  1. Informal discussion: The Settlement Benefits Association team explains Life Settlement options available to the insured. The expert team reviews the policy and viability, and the policy owner completes a preliminary life insurance appraisal request.
  2. Review and evaluation: Once the insured submits the preliminary appraisal request, the team will review and evaluate it, gathering data from the insured and searching for buyers. Stage two comprises collecting medical records, performing mortality analysis, analyzing policy value, discovering interested buyers, presenting the insured’s case to buyers, negotiating offers, and communicating offers to the insured.
  3. Contracts and change of ownership: When the insured accepts the offer, the Settlement Benefits Association works on contract review and signing. Once all parties sign the agreement, the policy owner receives the cash settlement. After the life settlement payout is received, the insured enters a rescission period in which they have a window of around 15 days to change their mind and return the settlement money in exchange for the policy. The amount of days varies per state. 

Simplifying the Life Settlement Process

It is possible to sell your life insurance policy independently, but it is tedious and confusing to do so on your own. With a trusted and experienced Life Settlement brokerage, you can streamline the process and yield the best return on your investment. 

Settlement Benefits Association has over two decades of experience and is approved by the Life Insurance Settlement Association (LISA). We will help you navigate the complexities and nuances of this highly specialized market. Contact our experts online to learn more. 

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