• Peter C. Ciravolo

What are Life Settlements? Life Settlement 101 and FAQs



WHAT IS A LIFE SETTLEMENT?


A life settlement is the legal sale of an existing life insurance policy (typically of seniors) for more than its cash surrender value, but less than its net death benefit (via Institutional investor).


WHY WOULD SOMEONE WANT TO SELL THEIR POLICY?


The policy owner may no longer need or want his or her policy, he or she may wish to purchase a different kind of life insurance policy, or premium payments may no longer be affordable.


HOW ARE LIFE SETTLEMENTS POSSIBLE?


A life insurance policy is a transferable property that contains specific legal rights, including the right to:

  • Name the policy beneficiary

  • Change the beneficiary designation (unless subject to restrictions)

  • Assign the policy as collateral for a loan

  • Borrow against the policy

  • Sell the policy to another party

Thus, we are able to re-assign different parts of the life insurance contract.


WHAT IS THE PROCESS TO START A LIFE SETTLEMENT?

  1. Application: asks basic personal information policy information. Sign release forms for additional discovery.

  2. Review: The life settlement provider will decide whether or not they want to purchase your policy and what they are willing to pay. 

  3. Offer: This offer may be negotiable, and you always have the right to walk away from the transaction if you are not satisfied.

  4. Closing package: common documents in a closing package include a letter of competency (LOC), verification of coverage (VOC), life settlement contract, life expectancy reports, change of ownership form (COO), and change of beneficiary form (COB).

  5. Funds Transfer: Funds can be released through a single direct deposit or check, or through a serious of payments over a predetermined period.

Have a policy in mind? Upload it here, or schedule a time with BC Brokerage here.




BC Brokerage


Your Interests First


765-730-7146

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