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Most Seniors are unaware that their existing Life Insurance may possibly be liquidated for 10-60% of the coverage amount, regardless of the policy's cash surrender value.
A Life Settlement is the sale of an in-force life insurance policy to an institutional financing entity such as a bank or hedge fund for a lump sum settlement that is usually 3-5 times greater than the cash surrender value of the policy.
For a family looking for a way to fund senior living or private duty home care, a life settlement may be a viable option to create the funds needed to pay for this type of care. While the proceeds are unrestricted and can be used in any way you choose, most Life Settlements are utilized as a funding tool to purchase other needed financial products or to simply be used to pay for their long term care needs.
Senior care can be a rather large expense for many people, including those who have thorough financial plans: Although Peter had some money stored away, he still needed additional funds to cover the costs involved with long-term care as he recently turned 89 years old. With monthly insurance premiums draining his savings, he considered letting his $250,000 policy lapse in order to cut costs, instead, he contacted us. We were able to offer Peter $120,000 for his policy; covering his long-term care costs entirely.
With the extremely expensive costs of senior living, it's important for a family to have an experienced Senior Living Consultant on their side.
How Do I Get A Life Settlement Quote?
To learn more about obtaining a no fee, no obligation Life Settlement Quote, please watch this short video:
Whether it’s assisted living, a nursing home, or in-home-care, any senior care can be a heavy financial burden for seniors and their families. In most cases, social security and other government benefits don’t even come close to the expenses needed for quality senior care.
A Tax-Advantaged Life Care Benefit Plan can help seniors and their families utilize existing life insurance to pay for care. The insured can convert their life insurance into tax-free benefits by participating in a life settlement transaction in a unique way. This option is not contingent on the type of policy owned and can be applied to universal, whole, term, and group policies.
How much a policy is worth does not depend on the cash value of the policy, rather it is based on a portion of the death benefit. This makes it certain that seniors can receive the maximum amount of funds to be used towards their Long Term Care Benefit Plan. The Benefit Plan is an irrevocable, FDIC insured benefit account administered by a third-party ensuring the funds are protected for the recipient care.
The Benefit Plan can be adjusted to meet the changing needs of the enrolled and provides a final expense benefit to help cover funeral expenses. If the insured should pass away before the benefit amount is exhausted, any remaining balance is paid to the family or named beneficiary as a final lump sum payment.
The life settlement process can seem confusing to someone who has never completed a life settlement transaction. The steps involved in the process are generally the same for all life settlement companies. To demonstrate how life settlements work, we will go through the steps of a settlement, breaking them up into 8 key phases.
Before even seeking a settlement, the policyholder and their beneficiaries must make the conscious decision to
pursue a life settlement.
There are certain specifics that determine if an individual will qualify for a life settlement, such as premiums, the
life expectancy of the insured, and the death benefit. A Senior Living Solutions, LLC representative would contact
the insured / owner to inquire about their age and any medical ailments. The information disclosed will be used
by an in-house medical underwriter who will calculate the insured’s life expectancy and determine how much the
policy is worth. Senior Living Solutions, LLC works closely with Abacus Life Settlements, LLC to help in this
Abacus, or the chosen buyer, would then extend an offer to the insured. The offer would be more than the
settlement price, but less than the net death benefit. The buyer must be licensed in the state in which the owner
of policy resides.
If the amount offered by the licensed buyer is acceptable to the policy seller, they can choose to accept the offer
and request the required documents for review.
At this time the licensed buyer generates state-approved life settlement contracting documents. These
documents are utilized to record the life settlement transaction as well as spell out the agreement between the
seller and the purchaser. Both parties must sign and notarize the life settlement contracts.
Once the contracts are executed and all the required accompanying documents have been received, the
verification process begins. Often completed by a third party like a law firm, this verification agent will check that
all the contracting documents have been completed properly. They may also check that the policy is in full force
and good standing with the insurance company. They will verify that the funds for the purchase have been put in
an escrow account for the policy seller.
Subsequently, a request for ownership change will be sent to the insurance carrier. This ensures that the owner is
changed from the current policyholder to the buyer or the financing entity that the buyer names as owner.
After the insurance carrier has confirmed that the purchaser is listed as the owner, the escrow agent is instructed
to release the funds to the seller. The new owner is now responsible for all premiums going forward and the seller
has received payment for the transaction.
This concludes the life settlement transaction.
Aid and Attendance and a Life Settlement help these seniors afford their assisted living community!
A Life Settlement can generate offers that average 3-5 times more than the cash surrender value of the Life Insurance Policy!