LIFE SETTLEMENT GLOSSARY EXAMPLE
MALE - Age 69
$500,000 10 Year Level Term
- $1,985 Annual Premium
- $13,882 Conversion Annual Premium
Life Insurance Settlement Amount of $16,500
A retiree was about to drop his expiring term policy when he discovered it could be converted and sold using a life settlement.
As a result of the sale, he recovered most of the term premiums he had paid over the past ten years and used the proceeds to offset the cost of an extended tropical vacation.
T
- temporary life insurance agreements
- A legal agreement that grants conditional temporary coverage
between a life insurance company and a policyowner while a policy is
being underwritten.
- term life insurance
- A temporary form of life insurance designed to cover a time horizon
that is statistically shorter than the insured's underwritten life
expectancy.
- terminally ill
- For life and viatical life settlements, an insured whose life
expectancy is under two years.
- tertiary market
- The sale of a life settlement policy from one investor to another.
- transparency
- Within the life settlement industry, the full disclosure of all
aspects of a life settlement including all offers received and
anticipated or actual commissions paid.
- treaty reinsurance
- A standing reinsurance agreement between a reinsurance company and
a ceding life insurance company.
- trust agreement
- A legal agreement where a grantor transfers property to another
person or organization who administers the property for the benefit of
a third person or persons.
- trustee
- An the individual responsible for fulfilling the requirements of a
trust agreement.
- twisting
- A prohibited insurance sales practice whereby a life insurance
agent induces a policyowner to replace a life insurance policy when
such action is contrary to the policy owners best interest.
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