Clients that are considering a life settlement should be aware of the life insurance settlement options that are available to them in today’s market.
In past years, the offer to purchase a life insurance policy consisted of a cash only offer to the owner of the policy. This meant that if the life insurance policy qualified for a settlement, a cash offer would be presented to the client, normally as a percentage of face amount. For instance, if a client is selling a $1,000,000 policy and the offer to the client was a 10% offer, then the offer on the table is $100,000.
Life insurance settlement options today can consist of an insurance offer, which is an offer to provide the beneficiaries of the policy a percentage of the death benefit when the insured passes away. This can be a benefit to the family, since the policy is now being paid for by the new owner (investor), but will receive a small portion of the death benefit will be received by the beneficiaries to pay for final expenses. This will be provided to them tax free.
Other life insurance settlement options can include a combination of a cash offer and insurance offer, which also has its advantages to the client, since the owner will receive cash now, and the beneficiaries will receive tax-free death benefit.
The life settlement funders and investors continue to find innovative strategies for life insurance settlement options, which can be seen as a benefit to the industry, as it often gives more options to the owner of the life insurance policy.
To determine the value of your life insurance policy, please visit LivePDQ today!