Life Settlements Defined
A Life Settlement is the sale of an existing Life Insurance policy, where the policy owner sells the policy in exchange for a lump-sum cash benefit. Policy ownership is changed and the new owner assumes premium payments and becomes the beneficiary. The sale of an existing Life Insurance policy can provide many benefits to the policy owner.
Policies That Qualify
There are numerous life insurance policies that can be the subject of a life settlement. Typical provisions include the following:
Type of Policy
Indexed Universal Life
Non Convertible Term
Joint Survivorship Policies
*Check with IMS if your policy type is not listed.
Ages 65 and Older
(some younger ages can qualify)
Generally the older the Insured the larger the value of the Life Settlement
$100,000 - 100,000,000+
The larger the policy the larger potential value of the Life Settlement.
A moderate or major change in the Insured's health since policy issue.
A more significant change in health since policy Issue creates more value in a Life Settlement.
"IMS worked hard to help educate us about the process and the suitability of a life settlement. Once we got the process started he was transparent and professional."
- Maggie M.
When to Consider Selling a Life Insurance Policy
The economic environment and financial needs of consumers are consistently changing, all while people are living longer and the cost of living continues to go up.
The Life Insurance Settlement market has emerged as financial professionals and policy owners began demanding that more options for policy owners looking to surrender or cancel their Life Insurance policies.
There are a variety of Reasons why Policy owners may want to sell their policy:
Insurance is no longer needed
Premiums become too expensive or unaffordable
Need for emergency funds
Changing estate planning needs
Life Settlements are a vital component of senior financial planning as policy owners and can provide Liquidity and Retirement Income.
A Life Settlement may also provide the follow benefits:
Mitigate longevity risk
Provides capital to purchase a new, more cost efficient life insurance policy, a long-term care policy, or annuity
Provide funds for Long-Term Care
Provide exit strategy from insurance based Buy/Sell, Key Man, or Deferred Compensation Plans