Part 5: Life Settlement Risks & Consider
The Nature Of Life Settlement Transactions
Engaging in any major financial transaction involves some level of risk, but you should know that increased regulation in this industry means that you should be provided with clear, transparent, ethical guidance at every turn. Before committing to this process, consider the following concerns and weigh your own personal sense of comfort and risk:
“A life settlement, in our view, is a legitimate transaction made in the financial interest of the policyholder. There can be valid estate considerations or a change in family circumstances that support the need to sell a life insurance policy. For example, parents who have had life insurance policies for decades may no longer need or desire to leave death benefits to their grown children. It might be better for the parents to have access to a cash settlement for that policy. The most important concern for a consumer in any insurance transaction is that the consumer makes an informed and educated decision. That decision should be in the best interests of their families and not necessarily in the best interest of the person or firm who is involved in the commercial aspect of a life insurance transaction.” -Michael McRaith, Commissioner of Insurance in Illinois
- Fees. A reputable firm will not charge any fee to prepare your life settlement paperwork. You are engaging in a transaction in which both parties stand to benefit, so it simply doesn’t make sense to pay a fee up front for this service.
- Commission and Percentages. As you work through your life settlement process, you should be able to ask about how your broker will be compensated and how any commission fees will be rendered. An ethical broker will be clear and transparent with you about how they and their firm stand to benefit, while also working to secure you the highest benefit possible.
- Privacy. Completing life settlement paperwork often involves acquiring and compiling private medical information. Work with a firm who you trust will keep your important documents confidential, and treat your health information with the respect it deserves. Windsor Life Settlements has a strict confidentiality policy. We will not share your information without your written permission. Any written authorization for sharing this information will explain who may receive the information and why it needs to be released. The employees of Windsor Life Settlements all have reputations for abiding by the highest standards of business ethics and integrity. We are committed to client confidentiality and fraud prevention with strict internal compliance processes.
- Personal Comfort. For some seniors, the idea that a company will benefit following your death can be initially uncomfortable. Talk through the benefits and any areas of discomfort with your broker and your family and friends to make sure this truly is the right fit for you.
- Tax Concerns. Always discuss any potential tax implications with a tax professional before moving forward. There are many benefits to pursuing a life settlement, including the ability to spend down assets to qualify for Medicaid, but you should go into the transaction with a clear sense of what your benefit will do to your current tax situation.
- Timeline. At Windsor, we typically complete the life settlement process in 90-120 days, although very simple cases can be expedited. We are happy to work with you on your liquidation goals and will give you honest, clear responses so that you can manage your timeline and plan for your immediate future.
At Windsor Life Settlements, our goal is to get you the maximum value for your life insurance policy. Our knowledge of the life settlement market and our relationships with investment groups make for a quick and thorough evaluation of your policy. Transparency is important in all financial matters, which is why Windsor Life Settlements 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 to keep your private financial and medical information secure.
To find out more, contact one of our principals at (888)-994-6376