You purchased your life insurance policy when your children were young or you financially supported your spouse. Now that your children are grown or your spouse no longer needs your financial support, your insurance needs have changed. Your beneficiaries are not likely to need the death benefit that it pays out.
The Life Settlement process allows you to sell your current policy for cash to a third-party buyer for a lump sum. You get a cash payout worth less than the death benefit but more than the policy’s surrender value. You can use the money however you would like.
Settlement Benefits Association can help you maximize the value of your life insurance policy and manage the legal aspects of the sale. Learn more about the process of a Life Settlement.
Your life insurance policy belongs to you. Like any other property or asset you own, you can sell it. You can sell your term life insurance policy for cash, following a decision by the U.S. Supreme Court in 1911. Multiple factors affect the value of your policy and the amount that a buyer may pay for it.
A buyer may be more likely to purchase your life insurance if it has a high face value and you are older or have a short life expectancy. Buyers take on the responsibility of paying the premiums on your policy. The fewer premiums they pay, the more valuable the policy is to them and the more they are likely to pay for it upfront.
There may be restrictions on the sale of an insurance policy. For a Life Settlement, you should be over the age of 65. You can be any age for a Viatical Settlement but must have a terminal illness that reduces your life expectancy to fewer than two years.
The Life Settlement process with Settlement Benefits Association consists of three steps.
The first step when selling your life insurance policy is to talk to us. We will explain the Life Settlement options available to you.
We will also examine your policy and current situation to help you determine if a Life Settlement is viable. If a Life Settlement is a good choice, you will complete a preliminary life insurance appraisal request.
You are under no obligation to continue at this stage and throughout the Life Settlement process. You can change your mind and decide not to sell until the end of the rescission period.
After we receive your preliminary life insurance appraisal request, we begin the review and evaluation process. During this phase of the process, we gather more information from you and look for buyers for your policy. The steps involved include:
Once you have decided to accept the offer, we begin the third step in the Life Settlement process — contract review and signing. After all parties have signed the contracts, the transfer of ownership takes place, and you receive your cash settlement.
The steps in the process include:
The length of the Life Settlement process varies based on several factors, including your insurance carrier, state, and the buyer. Generally, the process when working with Settlement Benefits Association takes between six and eight weeks. Here is a breakdown of how long each part typically takes:
You may wish to speed up the Life Settlement process. While some steps are beyond your control, such as waiting for the insurance company to change the owner and beneficiary, there are times when you can help expedite the process. Before medical records collection, you can contact your care providers and let them know we will be requesting the records. You can also review and sign the contracts quickly.
Life insurance has its purposes, but you may have outgrown the need for a policy. Your life situation may have changed enough that you are better served by selling your policy than keeping it. While each person’s reasons for selling a life insurance policy will differ, some of the most common reasons for a Life Settlement include:
As a Life Settlement broker, we help you find the best company to sell your life insurance policy to. The companies that buy your life insurance policy are called Life Settlement providers. They are often banks or other companies who view the purchase of life insurance policies as an investment.
After buying a policy, the Life Settlement provider pays the premiums and collects the death benefit once the original owner passes away. Ideally for them, the value of the death benefit will be more than they paid for the policy and premiums combined.
As part of the Life Settlement process, we work to increase your policy’s price. We do so by collecting bids from multiple buyers. The more demand there is for your policy, the more buyers will pay. We work to get the most bids possible in order to increase competition and the value of your policy.
How much you can sell your life insurance policy for depends on the size of the policy and your life expectancy. The demand for your policy also affects its sale price. Your health and the cost of the premiums also play a role.
In many cases, people in the best health will not get the best offers on their life insurance policies. The buyers do not want to risk buying a policy they will need to pay premiums on for many years. The cost of the premiums can also make a policy more or less valuable. If the premium payments are low, buyers may be more likely to submit competitive offers on the policy.
A policy with a high death benefit will get higher offers than one with a low death benefit. Usually, the minimum policy amount is $100,000.
Contact us to see how much your life insurance policy may be worth to a buyer. We are happy to examine your policy and situation and provide an idea of whether a Life Settlement will be valuable to you. There is no obligation for this initial, informal chat.
Whether you pay taxes on your Life Settlement depends on the type of settlement and how you use the proceeds. If you are terminally ill and pursue a Viatical Settlement, you may not have to pay federal tax on it. State tax laws vary.
Our tax estimator can help you better understand the potential tax obligations of a Life Settlement. We recommend showing the results of the tax estimator to your tax preparer or accountant. They can give you a better idea of your responsibility and what you may owe the government after a Life Settlement.
The first step when selling your life insurance policy is to talk to us. We will informally evaluate your policy and situation and give you a better understanding of your Life Settlement options. From there, you can decide whether to continue with the sale — there is no obligation.
Use our Visual Valuator to get started with the Life Settlement process.