Reverse Life Insurance

The road to financial stability can be difficult to navigate. Life presents twists and turns and detours, and sometimes an alternative route is needed. Whether you are a financial advisor, insurance agent, or an individual looking for solutions, you should know that there are atypical options that may be just right for the circumstances.

A life settlement is one such option available to older individuals in particular. This financial transaction, which involves selling an existing life insurance policy for a lump sum of cash, can be thought of as reverse life insurance. In fact, it’s often referred to as just that, as the policy holder gets paid not because the insured individual has died, but while he or she is still living. It differs from an annuity because the payout is a lump sum, and it’s different than accepting the policy’s cash surrender value because the settlement amount is typically several times higher. The policy holder will no longer have to make premium payments, either.

Typically, the insured individual in this “reverse life insurance” transaction is 70 or older and has experienced a negative change in health. There are exceptions, however. The important takeaway is that this is the right solution for many ill or older individuals who believe their financial situation has hit a roadblock.

Life Settlement Options

Life settlements can be completed for multiple types of life policies — universal, indexed universal, whole, joint survivorship — even term policies, both convertible and, in some circumstances, nonconvertible.

Purchasers, called “providers” (typically investment companies), buy policies knowing they eventually will collect the death benefit amounts as the return on their investment. The benefits to sellers vary on a case-by-case basis. The policy holder may be saddled by increasing premiums, the beneficiaries may no longer be reliant upon the death benefit payout, or the policy holder may face other financial obligations or simply want the lump sum for living expenses or an enhanced retirement lifestyle. The money from the lump sum can be spent however the recipient sees fit.

The amount of the lump sum is based on several factors, including the following:

  • The amount of the death benefit
  • The premium amount
  • The age and medical condition of the insured
  • The type of policy

Important, too, is that nearly every state has regulations in place to protect both those who sell their policies as well as investors.

Why Work With IMS Settlements?

If you are a financial advisor exploring options for a client, or an insurance agent looking out for a policy holder who is considering letting a policy lapse, it’s prudent to consider a life settlement as a sort of reverse life insurance solution. In addition to creating additional capital for your client and providing a value-added service, you will receive a commission. You may also benefit from additional business if your client uses some of the proceeds to buy replacement life insurance, long-term care insurance, or an annuity.

Here are some additional reasons to work with IMS Settlements:

  • We have more than 50 years of combined experience in the life insurance industry.
  • We’ve established a nationwide network of numerous life settlement providers so the policy to be sold draws the highest bids.
  • Our bidding process is transparent.
  • We offer a 100% satisfaction guarantee backed by our outstanding customer service.
  • IMS Settlements is licensed in the appropriate states to help with these transactions.

If you would like to understand more about reverse life insurance, life insurance settlement options, or the current market, we’re here to help. Contact us or request a free evaluation.


"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.

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