Life Settlement Case Study 1

Life Settlement Case History 1
Strategy to Purchase a New Policy for Spouse

Profile: Male age 74 in moderate health.
Type of Insurance: Universal Life
Death Benefit: $1,500,000
Premium: $42,000/Annually
Surrender Value: $38,000

Issue : The client maintained this policy for estate purposes but the premiums that were supposed to “vanish” by this time hadn't for reasons outside his control. Before he surrendered the policy for the Cash Surrender Value, his advisor recommended that he learned what the fair market value was for his policy. The advisor explained that just like other business markets, a new market has developed in the financial services industry, and there was a simple process to assess his current life insurance.

Client sold the policy for $225,000, creating an additional $187,000 that he would not have received if he had not participated in this non-binding policy appraisal.

Gain to the Client : Policy owner was able to use the proceeds to fund the remaining policies he had in force and purchase a new $1,000,000 policy on his wife for their heirs.

This life settlement case study is just one example of how life settlements can be a beneficial financial planning tool.