What to look for?

Integrity - Reliability - Experience

It is well accepted that a life settlement can represent a very attractive non-forfeiture option for policy owners that are considering a lapse or surrender.

~ 88% of UL and term contracts do not result in a death claim (1).

Understanding the most common scenarios for Life Settlements will enable you to be a better problem solver for your clients and, most importantly, help ensure that they are aware of their options.

When is a life settlement appropriate:

  • Underperforming UL Policies - Low interest rates have taken a toll on the performance of many Universal Life policies. Faced with rising premiums and increasing insurance charges, many policy owners are reducing their face amounts or surrendering their policies. Retained death benefit strategies, as well as cash options, offer these policy owners attractive alternative solutions.
  • Expiring Term - Most term policies are never converted. When the level premium payments end, policy owners are quick to drop their coverage. Meanwhile, buyers are eager to purchase convertible term, often allowing policy owners to recoup the premiums they’ve paid.
  • Excess Coverage - The changes brought about by the American Taxpayer Relief Act of 2012 (ATRA) mean that 99.8% of estates will now pay no federal estate taxes (2). ATRA not only changed the way many advisors were selling insurance, it also changed the insurance needs for many policy owners.
  • Business Planning - When a business is sold, passed down to the next generation or when a key person retires, the needs for existing life policies are re-examined. The sale of a policy can provide cash to assist with transition or improve the company’s balance sheet. Additionally, companies faced with bankruptcy may seek to sell life insurance using the funds to pay creditors.
  • Planning Needs Change - As time passes, policy owners planning needs often change and their life insurance may no longer be the priority it once was. Concerns about support for dependants may diminish, while proper estate planning can reduce the need for insurance over time. In some cases, divorce or the passing of a spouse can lead to changes in the need for coverage as well.
  • Greater Demands for Liquidity - People are living longer than ever and have higher demands for liquidity as a result. Policy owners may be required to prioritize current cash flow over maintaining their life insurance. In those cases, a life settlement can help compensate for rising healthcare and long term care costs, as well as the dissipation of their retirement savings.

In order to find out if your policy is likely to qualify, please complete the following form. If you prefer to speak to someone right away or have additional questions, please call us at 877-778-7991. We can also be reached via email at contact@evergreensettlements.com.

  • (1) Milliman USA
  • (2) Joint Committee on Taxation, “History, Present Law, and Analysis of the Federal Wealth Transfer Tax System,” March 16, 2015