Family Law Attorneys...
A Financial Windfall Awaits
Many Unsuspecting Senior Clients
An Important Notice For...
Family Law Attorneys
Elder Law Attorneys
Estate Planning Attorney
Business Attorney
Divorce Attorneys
Bankruptcy Attorney
Tax Attorney
A New Fiduciary Responsibility for Advisers
Read this adviser liability article
Let us establish why it's part of a fiduciary responsibility to investigate the life settlement market. We'll demonstrate why a life insurance policy appraisal should be a natural step in the planning process for seniors age 65 and older and why it must be considered as an alternate exit strategy to lapsing or surrendering a life policy.
With millions of seniors struggling financially due to dwindling savings, investments and home equity, and even for those seniors who are sustaining a comfortable lifestyle, a life settlement can provide an unexpected and substantial financial windfall for certain senior life insurance police owners.
Life settlements are relatively unknown to life insurance policy owners and also to many family law attorneys. These valuable financial instruments can prove to be extremely lucrative for many senior clients.
What is a Life Settlement?
A life settlement is the sale of a life insurance policy owned by an individual, a corporation, partnership, foundation, trust, non-profit, or charitable organization, that is no longer needed or wanted. The policy is sold for less than the death benefit amount but for more than the cash surrender value, if any. The buyer becomes the new policy beneficiary and is responsible for paying future premiums. Payout to the new owner occurs at the death of the seller.
The Market
For more than 10 years the life settlement industry has witnessed steady growth. According to a Life Insurance Settlement Association report, growth is expected to reach $160 billion - a tenfold increase - over the next several years.
The Alliance for Aging Research 2008 report indicates that 6,000 Americans are reaching age 65 every day. These seniors are seeking new financial solutions to fund their retirement years.
Policy Statistics
90% of all life insurance policies either lapse or are surrendered and don't remain in force.
How Does A Client Benefit?
In the past, life insurance policy owners had two options: either surrender the policy for any cash value, or let it lapse. Now, policy owners have a third option - to sell their policy to a third party for a higher payout than any cash surrender value.
Cash benefits gained from a completed life settlement transaction allow for:
Long-term or other medical care needs
Charitable giving
Gifting to family
Better suited insurance coverage needs
Debt reduction or elimination
Payoff of income or other tax obligations
Investment opportunities
Divorce liquidity needs
Bankruptcy liquidity needs
Discontinuation of key-man coverage that no longer applies
Discontinuation of a buy/sell agreement that no longer applies
Who is Eligible for a Life Settlement?
Someone age 70 or older,
With or without health concerns, who is the
Owner of a life insurance policy held in force for at least two years, and
With a death benefit or face amount of $500,000 or greater.
Three main components of a life settlement include:
The death benefit amount
Annual premium
Life expectancy.
Normally, the lower the premiums and life expectancy, the higher the policy's market value.
Actual Life Settlement Case Studies
Case #1
Male, age 74
Policy Type: Universal Life
Face Amount: $1,000,000
Annual Premium: $31,600
Cash Surrender Value: $0
Life Settlement: $415,000
Case #2
Male, age 72
Policy Type: 10-year Term
Face Amount: $500,000
Annual Premium: $3,795
Cash Surrender Value: None
Life Settlement: $145,000
Case #3
Female, age 79
Policy Type: Whole Life
Face Amount: $1,000,000
Annual Premium: $34,664
Cash Surrender Value: $85,260
Life Settlement: $335,000
Case #4
Male, age 69
Policy Type: Term
Face Amount: $500,000
Annual Premium: $13,872
Cash Surrender Value: None
Life Settlement: $280,000
Case #5
Male, age 73/Female, age 70
Policy Type: Survivorship
Face Amount: $3,000,000
Annual Premium: $25,000
Cash Surrender Value: $128,424
Life Settlement: $485,000
Case #6
Female, age 80
Policy Type: Universal Life
Face Amount: $3,000,000
Annual Premium: $96,000
Cash Surrender Value: $403,617
Life Settlement: $1,150,000
Case #7
Male, age 72
Policy Type: Term
Face Amount: $1,400,000
Annual Premium: $24,000
Cash Surrender Value: None
Life Settlement: $385,000
Summary
Whether you are a sole family law practitioner or associated with a group of family law attorneys, your clients rely on trusted legal counsel when it comes to making decisions about buying, converting, surrendering or selling one of their most valuable assets - a life insurance
policy.
Summary:
Clients of family law attorneys rely on trusted financial advice when it comes to making decisions about buying, converting, surrendering or selling one of their most valuable assets - a life insurance policy.
If a senior client is deciding to let an unwanted or unneeded life policy lapse or to surrender it for any cash value, know that selling the policy can return, on average, three to five times the cash surrender value or more. Even a convertible term policy can be sold for a substantial cash payout.
Our services are provided exclusively on behalf of the policy seller, shopping policies to more than 40 funding sources to secure the highest possible cash offer.
Additional Articles for family law attorneys:
The Examiner - Eldercare Funding Options - Life Settlements
American Bar Association-An Introduction to Life Settlements
AARP Bulletin Today - Turning Life Insurance Policies Into Cash
"Life insurance settlements provide living benefits that can be utilized by individuals, corporations, trusts, and non-profit or charitable organizations, alike. Senior policy holders, family law attorneys and their clients need to be acutely aware of the tremendous monetary value hidden within many life insurance policies."
|
Click here to see if your client qualifies.
Family law attorneys...let us help you educate your senior clients about the benefits of this valuable asset
Turn to trusted professionals to receive
your free, no-obligation policy appraisal!
Leave this Family Law Attorneys page and return to Life Settlements page
|
