Accelerated Life Settlements: Seniors Selling Their Life Insurance For Cash

CASE STUDIES

KEY PERSON RETIRING

Insured: Male, 67
Policy Type: Converted Term and multiple Universal Life
Face Amount: $5,500,000
Cash Surrender Value: $36,069
Life Insurance Settlement: $1,150,000

BACKGROUND
An executive had several key-employee policies to insure his executive position in the company. After the company was sold, the key-employee policies were no longer needed.

DETAIL
The executive consulted his advisor about selling the policies. The advisor had the policies evaluated and it was determined the fair market value to be
$1,150,000. This was 30 times the cash surrender value.

RESULT
The client was able to use the proceeds from the life settlement to pay off a note he had with the corporation. The remaining portion of the proceeds was invested in an annuity for retirement, since the client did not have children or a spouse. This was treated as a 1035 exchange for tax purposes.

ESTATE PLANNING TOOLS

Insured: Male, 77
Policy Type: Universal Life
Face Amount: $13,039,734
Cash Surrender Value: $1,452,585
Life Insurance Settlement: $2,833,000

BACKGROUND
The executive had multiple life policies including survivorship for estate planning purposes and several smaller policies. These policies had been taken out to insure the husband as the main income earner. When his wife passed away first, the policies were no longer needed.

DETAIL
When the market value was twice over the cash value on one of the policies, the client then decided to have seven more policies appraised. The total market value of the eight policies was estimated at $2,833,000, twice the cash value of the policies.

RESULT
The client used the proceeds for further estate planning purposes.

UNDERFUNDED UNIVERSAL LIFE

Insured: Male, 68 and Female, 67
Policy Type: Universal Life and Survivorship Universal Life
Face Amount: $4,000,000
Cash Surrender Value: $0
Life Insurance Settlement: $110,000

BACKGROUND
This couple owned multiple under-funded universal life policies that were in danger of lapsing. They still needed insurance for estate planning purposes, but were looking for new policies that would reduce their annual premium outlay.

DETAIL
As a life settlement option it was determined the fair market value for their policies was $110,000.

RESULT
The couple used the proceeds toward more efficient, better performing policies. They were able to keep the same amount of coverage and reduce their premiums, effectively extending the number of years that the coverage would remain in force.

POLICY NO LONGER NEEDED

Insured: Male, 82 and Female, 78
Policy Type: Survivorship Universal Life
Face Amount: $2,000,000
Cash Surrender Value: $344,000
Annual Premium: $79,500
Life Insurance Settlement: $595,000

BACKGROUND
Couple owned a Survivorship policy where the cash value was decreasing and was likely to lapse many years prior to maturity.

DETAIL
The couple considered a 1035 exchange into a new Survivorship Universal Life policy as well as surrendering the existing policy and using the cash value to help fund a new policy on the wife’s life. They were able to provide a better solution utilizing a Life Insurance Settlement.

RESULT
The couple used the additional proceeds generated from the Life Insurance Settlement (~$236,000 net of tax) toward a new Universal Life policy on the wife alone that is guaranteed not to lapse, no matter the cash value. The premium on the new policy became $26,400, which represents a savings of more than $52,000 annually.

UNAFFORDABLE POLICY

Insured: Male, 72
Policy Type: Universal Life
Face Amount: $500,000
Cash Surrender Value: $0
Life Insurance Settlement: $66,400

BACKGROUND
The customer owned a universal life policy that was becoming expensive for him to maintain. He still had a need for the coverage and was going to look into a new policy with lower premiums prior to surrendering this policy.

DETAIL
Rather than surrendering the policy, the client explored a Life Insurance Settlement option. It was determined the fair market value of his policy was $66,400. The settlement would give the client the capital to get new coverage that he could afford.

RESULT
The client received $66,400 and is considering purchasing a new investment related product

Disclaimer: Life Settlement amounts are based on numerous factors including but not limited to; Age, Health, Policy Premiums & Size. The listed Life Settlement cases are for illustration purposes only and do not guarantee future offers of submitted cases.

Contact us for a no cost no obligation consultation regarding Life Settlements and how they pertain to your policy! Accelerated Life Settlements, Inc. is a licensed broker for Life Settlements. We are not licensed in all states.