Question 1

What is a life settlement?

Accepted Answer

A life settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its face value. The buyer becomes the new owner and beneficiary of the policy, pays future premiums, and receives the death benefit when the insured passes away.

Question 2

Who qualifies for a life settlement?

Accepted Answer

Generally, policyholders who are 65 or older with a life insurance policy worth $100,000 or more may qualify. However, those as young as 50 with serious health conditions may also be eligible. The policy must be convertible or permanent (whole life, universal life, etc.).

Question 3

How much can I get for my policy?

Accepted Answer

Settlement offers typically range from 10-25% of the policy's face value, though some policies receive offers of 30% or more. The exact amount depends on your age, health status, policy type, premiums, and current market conditions. Use our calculator for a preliminary estimate.

Question 4

How long does the process take?

Accepted Answer

The typical life settlement process takes 2-4 months from application to funding. This includes gathering medical records, underwriting, receiving offers from buyers, and completing the transaction. Some cases may be faster or slower depending on complexity.

Question 5

Is a life settlement taxable?

Accepted Answer

Yes, life settlements may have tax implications. Generally, proceeds up to the amount of premiums paid are tax-free, amounts up to the cash surrender value are taxed as ordinary income, and amounts above that may be taxed as capital gains. We recommend consulting a tax professional.

Question 6

What happens to my beneficiaries?

Accepted Answer

Once you sell your policy, the buyer becomes the new beneficiary. Your original beneficiaries will no longer receive the death benefit. However, you can use the settlement proceeds however you wish, including providing for your beneficiaries in other ways.

Question 7

Is my information kept confidential?

Accepted Answer

Yes, we take privacy seriously. Your personal and medical information is protected by strict confidentiality agreements and HIPAA regulations. Information is only shared with licensed life settlement providers for the purpose of obtaining offers.

Question 8

What if I change my mind?

Accepted Answer

Most states have a rescission period (typically 15-30 days) after closing during which you can cancel the transaction and keep your policy. Additionally, you're under no obligation to accept any offer—you can decline and keep your policy at any time before closing.

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