Your Life Insurance Policy Is A Valuable Asset, Just Like A House Or Car. Get The Highest Offer Possible.

Life Settlement Brokers Secure Higher Offers For Policyholders, Even After The Broker’s Commission.

Life Settlements 101

For many, selling a life insurance policy is an entirely new concept that many find difficult to understand. In the United States, most policyholders are unaware of the life settlement option entirely. As a result, over $100 billion in term policies, whole life policies, and universal life policies lapse annually. Based on 2008 data compiled by publicly available sources, more than 250,000 universal and variable universal policies with a face value of approximately $57 billion were lapsed by seniors over age 65. When term and whole life policies are included, the number of policies exceeds 1.1 million with a face value of $112 billion.

You do pay taxes on the proceeds from life settlements. However, the amount of money you lose to taxes is much less than it used to be. In some cases, viatical settlements may not be taxed.

Check out this taxation guide for more information on life settlement taxes. By all means, we aren’t tax experts but we can help clarify the details around life settlement taxation. For your specific policy and situation, talk to a tax professional. Every policy is different, and therefore will be taxed differently.

Have Life Insurance Settlements Always Been Legal?

Life insurance settlements have been around for over 100 years. The industry dates back to a Supreme Court case in the early 1900s. “Grigsby v. Russell” and others confirm that a life insurance policy is an asset, just like a house or car. Basically, you as the policy owner have a right to sell that asset at any time.

This particular case is a landmark U.S. Supreme Court case because it validated the marketplace.

Increased Transparency of The Market

As mentioned, life insurance companies want policies to lapse. They don’t want you to sell your policy to a third party. Doing so keeps them responsible for paying the death benefit. For this reason, life insurance companies haven’t always been transparent with policyholders. In particular about all the options available for their policy.

Policyholders sued Lincoln National Life Insurance for “shock lapses” and lack of disclosure. Shock lapses refer to Lincoln National increasing their customer’s premiums for the same level of coverage. This inevitably caused a large number of policyholders to suddenly cancel or lapse their policies at once.

Just a little push in that direction and the insurance company got exactly what they wanted. They didn’t disclose the financial option of life settlements to the policyholders. Besides, it’s easy to let the policy go when you don’t realize how much money you can get from it.

Since these complaints, some states have started implementing disclosure requirements. Thus making it mandatory for insurance companies to provide all available options to policy owners. In particular policyholders considering lapsing a policy.

Terms to know

Beneficiary

The recipient of the life insurance policy’s death benefit upon the insured’s death.

Death Benefit

The money the beneficiaries receive upon the insured’s death.

Face Value

The stated value of the life insurance policy as well as another term for the death benefit.

Premiums

This is the heading

The payment a policyholder makes to their insurance company in exchange for coverage.

Lapsed Policy

A policy that hasn’t had its premiums paid for some time. To be sure this happens after the company sends notices to the policyholder. As a result of a lapsed policy, the death benefit isn’t paid.

Viatical Settlement

A financial option available to policyholders with a chronic or terminal illness. They no longer want their policy. As a result, they sell their life insurance policy for a cash amount that is less than the face value.

Cash Surrender Value

The amount of money an insurance company will pay. That is if a policyholder voluntarily cancels (or surrenders) the policy before a death benefit is paid.

Term Life Insurance

A temporary life insurance policy that gives coverage for a predetermined amount of time. Additionally, the premiums may increase over time or stay consistent.

Whole Life Insurance

A permanent life insurance policy with a savings component that accumulates cash value. Significantly, premiums for whole life insurance policies are guaranteed to stay the same.

Universal Life Insurance

An insurance policy that’s similar to a whole life insurance policy. But the premiums are not fixed and will increase over time.

Life Settlements With Windsor

At Windsor, we typically complete the life settlement process in 60-90 days, although very simple cases can be expedited. We’re happy to work with you on your liquidation goals. We’ll give you honest, clear responses so that you can manage your timeline. As well as plan for your immediate future.

Our goal is to get you the maximum value for your life insurance policy. Sometimes the best option is not a life settlement. For example, many clients have riders in their policy like an “Accelerated Death Benefit” that can be a better option. Our knowledge of the market and our relationships with investment groups make for a quick and thorough evaluation of your policy.

Transparency is important in all financial matters. Brokers will keep you up-to-date on all the details of the sale and transfer of your policy. You can also rest assured that we will follow industry best practices. Thus keeping your private financial and medical information secure.

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Windsor Life Settlements

If you're over age 75 or living with a terminal illness, don't allow your policy to lapse or settle for low offers from insurance companies. Consider receiving multiple offers from the Windsor Marketplace. Get a new quote today!