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Life Settlements Home

Life Settlements Questions

Life Settlements Benefits

Life Settlements Get an Offer

Life Settlements Examples

Why Choose Final Arrangements

Understanding Life Settlements

A life settlement is the sale of an existing life insurance policy that is not performing up to expectations or just no longer needed. Life settlements enable qualifying policy owners to receive fair market value for their policies by accessing the secondary market for life insurance.

Any number of situations can create the need for a life settlement:

• Change in interest rates
• Change in business situation
• Estate liquid
• Estate values decreased
• Bankruptcy
• Divorce

The reason why a policy was purchased can change over time. And when that happens, a life settlement may be an ideal option.

Life Settlements offer a unique opportunity both to the insurance and financial professional and the policyholder. As circumstances change, the ability to obtain cash from the sale of a life insurance policy can be particularly valuable. The majority of Life Settlements transactions are entered into for the purpose of purchasing other valuable insurance and financial products. Life Settlement proceeds are unrestricted and can be used to fulfill a wide range of financial and estate planning objectives for your client. The settlement amount is determined by such factors as the policy parameters, age, and health of the insured.

Potential Benefits to the Financial Professional:

• Demonstrate value to clients by offering a valuable new financial option which can result in "found money" for financial planning
• Demonstrate value to clients by reducing or eliminating future Life Insurance premiums
• Provide clients with additional funds to purchase other preferable coverage, such as Annuities, Long Term Care, or new Life Insurance
• Help clients recover premiums from their initial investment
• The writing agent retains any residuals from the original policy
• Possible commission on Life Settlements

Benefits for the Corporate Policy Holder

• A key-man policy is no longer needed due to retirement or change in business structure
• Pay off company’s debt
• Bankruptcy forces liquidation of assets
• Buy/Sell agreement is no longer needed due to the sale of the company
• Changes in a deferred compensation program

Transaction Process

The life settlement process begins with, a sophisticated valuation system, to determine the market value of a life insurance policy. Here is how the process works:

• A completed questionnaire and authorization is submitted to a Final Arrangements Licensed Agent along with carrier illustrations and medical records for the last five years.
• The Final Arrangements Licensed Agent values the policy to determine if an offer can be made.
• The Final Arrangements Licensed Agent relays the offer to the advisor.
• Once an offer is accepted, the Final Arrangements Licensed Agent issues closing documents.
• After receiving the executed closing documents, change of ownership and beneficiary forms are sent to the life insurance company.
• Upon confirmation of the change forms being processed, funds are released to the policy owner within 72 hours.