Literally billions of life insurance policies annually are lapsed or surrendered by policyholders who no longer, want, need or can’t afford their life insurance policies.
The following cases illustrate the benefit provided to the policyholder through life settlements.
- A 74-year-old male owned 2 universal life policies that were transferred to him in the sale of his business. Four years later, he could no longer afford to pay the premiums. He was able to sell the two policies with face amounts totaling approximately 970,000 for 390,000. The sale proceeds allowed him to afford increased health care costs for his chronically ill spouse.
- A 78-year male and 74-year-old female, husband and wife, had purchased a second to die policy with a 2-million-dollar death benefit as part of their estate plan to minimize estate taxes. Based on the increase in the estate tax exclusion they no longer needed the policy for its original purpose. They both were in fairly good health and sold their policy for 690,000. They took some of the proceeds and funded 529 plans for their 5 grandchildren’s college education and took a 2 month trip to Europe that they always wanted to take but had thus far never got around to it.
- A 68-year-old female owned a 500,000-term policy and could not afford to convert the policy and pay the premiums. She converted the policy, sold 250,000 of the policy for 90,000 to help pay for the other 250,000 in coverage she kept for herself.
These are just a few examples of how a life settlement can be used to greatly enhance a policyholder’s financial plan. If you are a policyholder or a financial advisor with clients who own life insurance, they are considering letting lapse or surrendering, call us today for a no cost/no obligation consultation!
Dan Penning
Life Settlements Specialist
Professional Life Settlements Plus
