Life Settlements made Easy with Apex
Apex Settlement group is a leading Life Settlement service.
Apex helps our clients understand the Pro’s and Con’s to Life Settlements; to ensure you realize your Life Insurance policy’s maximum cash value.
See if you are eligible for a Life Settlement today!
Life Settlement Key Terms
Understand the key aspects to Life Settlements
The amount of money that will be paid to the beneficiary (or beneficiaries) upon the death of the insured person.
The stated dollar value of the life insurance policy. This amount usually equals the policy’s death benefit
The amount paid by an insurance company to the policyowner if they voluntarily cancel or surrender their policy.
A type of life settlement designed exclusively for policyholders who are terminally or chronically ill.
What Is a Life Settlement?
A Life Settlement is the sale of a life insurance policy in exchange for a lump sum cash payment.
In a Life Settlement, the settlement amount will be more than the cash surrender value of the policy, but less than the death benefit .
In exchange for the lump sum payment, the seller will no longer be responsible for premiums or have rights to the death benefit . The buyer of the policy will assume all aspects of ownership, including future premium payments, as well as the death benefit .
Most people purchase a life insurance policy for financial protection. But when the need for protection has passed, or the policy premiums become an unwanted burden, a Life Settlement can be a great option.
Read on for an in-depth look into how life settlements work, their regulations, history, and everything you need to know to make an informed decision.
When does a Life Settlement Make Sense?
you no longer need the coverage, or you simply want the cash to fulfill a lifelong dream.
Premiums are unaffordable
Enjoy more wealth in retirement
Life insurance no longer needed
Term policy is expiring soon
Pay for quality senior living
Pay for better medical care
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policy may be worth today
Life Settlement Options
Retained Death Benefit
Life Settlement Options
- The primary advantage of a life settlement is financial. By eliminating ongoing premium obligations and receiving a lump sum of cash, you find yourself with new money in your budget. Sellers have many uses for these funds, from payment of medical or care expenses to supplementing retirement income and travel.
- The disadvantage, of course, is that the benefit of the policy will be paid to the new owner, and not the seller’s beneficiary. In addition, the cash payments are considered income, and therefore may have tax consequences and impact your eligibility for Medicaid.
- Other considerations include transaction costs or commissions, if you are working with a broker. Typically, a broker charges a commission as a percentage of the sale proceeds, and rates can vary. Know before you get into it.
- In general, your original decision to purchase life insurance was a financial one — to protect against a risk that could bring financial harm. Your decision to sell a life insurance policy is often financial as well: funding your next chapter is more valuable than protection.
Life Settlement Eligibility Requirements
Life Settlements Process
The life settlement process begins with collecting some basic information about the owner, the insured, and the policy. Apex offers a simple application that includes release forms so additional information can be requested for underwriting.
Detailed information is collected for underwriting of both the policy and the insured. For the policy, information will include the policy’s costs, features, and policy illustration. The releases will be used to gather the insured’s medical records for review.
Once the policy and insured records are collected, we have enough information to determine the value of your life insurance policy, and the amount of cash we can offer you to fund whatever you have planned next.
After completing the review, the provider extends an offer either directly to you or to your advisor. There is no obligation to proceed with a sale; it is 100% your choice whether to accept or decline the offer.
Once you accept the offer, the provider will prepare agreements (according to your state’s requirements). After contracting and diligence are complete, the request to change ownership + beneficiary will be sent to the carrier.
Once the change of ownership and beneficiary is verified, the settlement payment funds will be transferred to the policy seller through a single direct deposit or a check. At that point, you are free to enjoy the funds at your discretion!
Free, Instant, No Obligation Quote.
Life Settlement Taxes
Other regulations on the life settlements industry
Consult with a tax professional for clarity on both the IRS guidance and how your state of residence would view life settlement proceeds. Apex Settlement Group does not provide tax, legal, or accounting advice. This information is not intended to provide or to be relied on for tax, legal, or accounting advice. Consult your personal tax, legal, and accounting advisors before getting into any transaction.
¹ Baby Boomers have an average of $152,000 saved for retirement, according to the 19th Annual Retirement Survey of Workers conducted by the TransAmerica Center for Retirement Studies. This is not nearly enough to last through retirement. Based on information from the Bureau of Labor Statistics, adults between ages 65 and 74 spend, on average, $48,885 a year. Source: Investopedia
² Source: LISA Website