FAQ's

FAQ's

ANSWERED QUESTIONS

1What is a life settlement?
A life settlement is a financial transaction in which you sell a life insurance policy that you own to a third party investor, also known as a life settlement provider. You, the policy owner, receives an immediate payment for cashing in your life insurance policy. The Purchaser (investor) becomes the new owner of the policy as well as the beneficiary, and is now responsible for all future premium payments. When the insured (which may be someone other than you) dies, the Purchaser receives the policy’s death benefit.
2When is a life settlement the best option for my policy?

A policy owner chooses to cash out a life insurance policy for many reasons:

  • You may have changes in life and health circumstances
  • You may be looking for immediate cash to cover new or on-going financial obligations; such as long term care needs
  • Your policy may no longer be needed due to changes in your estate or financial planning
  • Your premiums have increased and have become too expensive to continue paying on the policy
  • Your Beneficiary is deceased or no longer has a need for your life insurance benefit
3Why should I choose a life settlement instead of surrendering the policy to the life insurance company?
In most cases, a Life Settlement can often times yield up to 4 to 8 times more cash surrender value than surrendering the policy to the carrier. It is in your best interest to look into a life settlement option and the potential financial gain prior to surrendering your life insurance policy with the carrier.
4Who is eligible to sell a life insurance policy?

Ideal candidates are Seniors age 70 and older (however we can review any age clients with terminal illness) who have:

  • A life insurance policy with a face amount of $100,000 or more
  • A policy that is owned either directly by the insured, or by a family member
  • Your policy may no longer be needed due to changes in your estate or financial planning
  • A policy that is owned by a Company or Trust which you control
5How much can I expect to sell my life insurance policy?
There is no across the board amount that all policies are worth. There are a number of factors that go into the final sale value of your life insurance policy, but on average many seniors can see 4 to 8 times more than the cash surrender value of the policy. Life Policy Solutions has a strong national network of trusted and licensed Life Settlement Companies that we have developed relationships with over the last 20 years. Our long-term relationships with the buyers ensures that the highest offers are secured for the sale of your life insurance policy.
6Do I need to be terminally ill to sell my life insurance policy?

No

While your health plays a very important part in the overall value of your life settlement, each day we work with seniors in varying stages of health. We have successfully sold policies for hundreds of senior clients of all ages and health status.

7How long does it take to sell my life insurance policy?

The life settlement process can take anywhere from 4 to 12 weeks depending on how quickly information is received by all parties.

The process is very simple:

  1. Determine your eligibility online or over the phone with us at 1-844-440-7355
  2. Fill out a simple life settlement application
  3. We will review your policy and medical information, and provide you with an instant estimate of your policy’s life settlement value
  4. If you like the estimate we will submit for additional policy information and medical records.
  5. After all information is gathered we submit your policy to our network of licensed and trusted life settlement buyers.
  6. Offers and/or Declines are received and negotiations are conducted to maximize the life settlement offer
  7. Per our commitment to full transparency, We share all offers with you and always push for the highest possible life settlement offer
  8. You decide whether you would like to accept or decline the highest offer we receive on your policy
  9. If you accept the offer, the closing process begins.
  10. Closing documents are prepared by the buyer and sent to the policyholder and insured for signatures
  11. Policy title, values, and other information is verified by the buyer
  12. Change of Owner and Beneficiary rights are completed
  13. Funds are released from escrow to the policyholder
8Do I need to take a new medical exam or submit to any medical tests?

No

We will submit for your medical records directly from your doctors. At no time will you need to, or be asked to, submit to any new medical exams or tests.
9What types of policies can be sold as a life settlement?
Almost any type of life insurance policy is eligible including Universal Life, Whole Life, and Convertible Term Life, Survivorship, Variable, as well as Trust and Corporate Owned Policies.
10Is my privacy protected?
Absolutely. Protecting your privacy is our number one priority and our commitment to you. We will never share your personal information without your knowledge and expressed permission.
11Who buys life insurance policies, and are they licensed and trusted?
The companies that purchase life insurance policies are called Life Settlement Providers. These Providers must be licensed with the Department of Insurance in the states which they purchase policies. Providers represent investors such as national banks, investment banks, international corporations, pension funds, hedge funds, mutual funds, and other financial institutions - including life insurance companies who are investing in life insurance policies through life settlement funds. Some well known market participants have included Berkshire Hathaway, Goldman Sachs, Wells Fargo, Credit Suisse, JP Morgan, Bear Stearns, Lloyds of London, TransAmerica, and many others. Life Policy Solutions has developed relationships with only the most trusted and secured life settlement providers.
12What is a life settlement broker, and how do they help to sell my life insurance policy?

A life settlement broker is a state licensed professional who represents the sale of a life insurance policy in the life settlement market. This individual or entity is regulated by the Department Of Insurance in the home state of the policy holder to solicit life settlement offers from multiple life settlement providers.

It can be in a policyholder’s best interest to work with a life settlement broker on the sale of their life insurance policy. A broker has the ability to present the policy to a larger network of life settlement buyers who are looking to buy life insurance policies. Rather than working with just one buyer and one offer, a life settlement broker has the ability to work with multiple offers at once from multiple buyers in order to maximize the highest offer possible for the sale of the life insurance policy.
13Is there any cost to sell my life insurance policy?

There is absolutely no out of pocket cost and no obligation to the policyholder or the insured to sell a life insurance policy. Life Policy Solutions covers any and all costs that may be required during the review and sale of your life insurance policy.

Life Policy Solutions is a life settlement broker and we do charge a commission once an offer is accepted and the policy is sold. Our commission can vary from a flat fee to a percentage of the sale price of the policy, and is always negotiated with the policy owner prior to the completion of the life settlement sale. Life Policy Solutions stands by it’s promise to always have the most competitive commission in the industry!

14Should I consult with my family and financial advisor during the life settlement sale process?

Absolutely

We encourage you to discuss the life settlement process and options with your family and financial advisors. It is important that you feel comfortable and well informed during the life settlement sale process. We encourage your family or financial advisors to be involved and ask Life Policy Solutions any questions that may arise.

15Do I need to accept the settlement offer on my life insurance policy?

No

Life Policy Solutions will strive to obtain the highest possible offers for the sale of your life insurance policy. Working in full transparency we will provide all the offers to you, and discuss the pros and cons of the sale. It is your choice whether you chose to accept or decline the highest offer. You have no obligation at any time to sell your life insurance policy.

16How do I get paid following the sale of my life insurance policy?
Upon acceptance of the highest offer for the sale of your life insurance policy, closing contracts are prepared by the Purchaser and sent to you for review and signatures. Once the signed closing contract is received by the Purchaser, and all policy information is verified, sale proceeds are deposited in an escrow holding account to be disbursed when the sale closes. Upon the Purchaser receiving verification of Change of Ownership on the policy, the life settlement proceeds are immediately released to the policyholder.
17Can I change my mind after I sell my policy?

Yes

In most cases you have up to 15 days from the life settlement closing date to change your mind and retain ownership of the policy.
18Am I taxed on the money I make from the sale of my life insurance policy?

The sale of your life insurance policy may be taxable. Life Settlement transactions typically result in capital gain taxes. In some circumstances, a portion of the settlement proceeds may be treated as ordinary income. This would occur only if the policy’s cash surrender value were greater than the total premiums paid into the policy. It is also possible that there are no tax consequences is the settlement proceeds are less than or equal to the adjusted basis in the policy.

It is also important to note that capital gains realized from a life settlement transaction could be offset by tax deductions based on “the entire cost of maintenance in a nursing home or home for the aged” (sec.1016 U.S. Master Tax Code 2008). In some viatical settlements where the insured has a terminal illness with less than 24 months to live, the settlement proceeds may be tax-free (Health Insurance Portability and Accountability Act of 1996).

For more clarification please refer to the IRS Bulletin located online http://www.irs.gov/irb/2009-21_IRB/ar06.html

Life Policy Solutions is not a tax advisor and we strongly encourage policy owners to seek professional tax advice prior to accepting any life settlement offers.
19After I sell my life insurance policy, who pays my premiums, and collects the death benefit?
Once a life settlement sale is completed, the Buyer will become the new Policy Owner and will now control all aspects of the policy including any changes to beneficiaries. The Buyer will pay all on-going premiums and it will be their responsibility to maintain the policy. Upon death of the insured the newly designated Beneficiary will receive the policy death benefit.
20Will I be contacted after the sale of my life insurance policy?
The insured and/or previous policy owner may be contacted on occasion by the Buyer to ask for any changes in health status. At no time should the Buyer be invasive or bothersome to the insured. Life Policy Solutions is always available to our clients to answer any questions following the life settlement sale.
21Can I still obtain new life insurance and benefits following the sale of my life insurance policy?
The insured may still be eligible for a new life insurance policy following the life settlement, however it is recommended that prior to accepting an offer you consult with your financial advisors about any complications that may arise in obtaining new life insurance. Life Policy Solutions can gladly refer you to a trusted and licensed life insurance agent to answer further questions.
22How do I get started?
  • Gather your life insurance policy information – we will need to know the type of policy, death benefit, premiums, cash value, and any existing loans
  • Be prepared to summarize the current and historic health of the insured
  • Complete our simple Application form or call us directly at 1-844-440-7355
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