Senior Life Insurance Settlement

We are working with a very interesting portion of the insurance industry. It is commonly referred to as Senior Life Insurance Settlement. Here is how it works:

1. Senior of 65 or older medically qualifies for $1M plus term life insurance policy

2. Company provides 100% financing of premium and insured has coverage for first 2 years

3. After 2 years insured sells policy at profit to company. This is usually 20% -60% of face value depending on the insured's health at that time. The worse the health the more it is worth to the insured.

4. Company continues to own the policy and pay the premiums hoping to profit when insured dies.

For many seniors this is an opportunity to create cash in their later years. Some people are uneasy with the fact that a company owns a policy on their life and it is in the interest of the company for the insured to die sooner rather than later.

A life insurance policy is an asset that can be sold - just like real estate or a car. A Life Settlement (sometimes called a Senior Life Insurance Settlement) is simply the sale of a life insurance policy by a senior citizen in return for a lump sum of cash. It's usually a "win-win" situation. The seller of the life insurance policy gets cash to use however they want from an unneeded or unwanted life insurance policy and with a "bonded" life settlement there is a predetermined rate of return for the buyer. It's a perfectly safe, high quality investment - often offering high returns.

Bonded Life Settlements are insurance policies that have been underwritten to the standards of a bonding company, who, for a bonding premium, is willing to provide a performance bond warranting that should the policy not mature by a specified date, the bonding company will buy-out the purchasers' interests in the policy at face value. The return on investment is typically lower on bonded policies because part of the purchase funds must be utilized to pay the performance bond premium... which is paid in a lump sum... up front... at closing.

I was with a 67 year old friend on the golf course last week. He told me that he surrendered a $500,000 life policy for the cash value of $130,000. He later discovered that he could have sold the policy for $200,000. so, he left $70,000 on the table because he was not aware of this product.

The message is to sit down with a qualified life agent and explore ALL the possibilities when buying or selling a policy.