A Life Settlement is the sale of an existing life insurance policy. The funds generated are greater than the policy's cash surrender value. Often the original planning needs have changed so that the policy is no longer needed. Premiums may have become a burden, and the original policy owner may want to eliminate the life insurance policy by letting it lapse. Now there is an alternative. The policy owner may sell his policy just as they would sell a stock or bond, or even their home.

This secondary market gives the policy owner a market that did not exist in the past. In prior years, the policy owner was left with only one entity to deal with, their own carrier. This exciting alternative allows the policy owner to obtain institutional, and real market pricing for this valued asset.
As an institutional funder, an offer generated through this process results in more money for your client and more assets to manage.

This means a person who, on behalf of an Owner and for a fee, commission or other valuable consideration, offers or attempts to negotiate Sales Contracts, between an Owner and one or more Providers, the subject of which is a Life Settlement. A broker represents only the Owners and owes a fiduciary duty to the Owner to act according to the Owners instructions, notwithstanding the manner in which the Broker is compensated. A Broker does not include an attorney, certified public accountant or financial planner retained in the type of practice customarily performed in their professional capacity to represent the Owner whose compensation is not paid directly or indirectly by the Provider.

Universal Life, Whole Life, Variable Universal Life, Term, and Convertible Term policies from US-based carriers rated 'A' or higher from S&P or 'A1' from Moody's. Second to die policies are eligible as well. All policies must be beyond the contestability stage.

Generally $100,000 to $20,000,000.

No, once the policy is sold, the client will have no future premium obligations whatsoever.

This is the usual and customary practice, except in the case of larger policies ($5,000,000 face value or higher). It is up to the carrier as to whether or not they will allow the policy to be split.

Life Settlements are suited for individuals age 70 or over who are evaluating health, financial and/or estate planning changes that have taken place in the latter years of their life. Typically, the client's situation has changed, so there is little need to keep the policy in force. A businesses can also benefit particularly when dealing with the nuances of a sale or company closure, or when dealing with key-man or corporate-owned policies. Please note that will typically pay significantly more than the cash surrender or lapse value.