What is a life settlement?
A life settlement is the sale of an existing life insurance policy to a third party for a lump sum cash payment. The buyer assumes responsibility for the policy, including future premiums, and becomes the beneficiary upon the policyholder's death.
How do I get paid for referring clients for life settlements?
When you bring in a client, our team guides them through the entire process from start to finish. Once the policy is sold, you receive a transparent payout percentage based on the settlement amount—no hidden fees, no guesswork.
How do I get started?
Simply connect with our team. We’ll walk you through the process and provide additional free training so you can start offering life settlements today.
Who qualifies for a life settlement?
Your clients could qualify for a life insurance settlement if:
• Their policy is valued at $100,000 or more
• They are 65 years or older
• They are business owners in transition
• They are facing health challenges
What are the benefits of a life settlement?
Life settlements offer policyholders an opportunity to convert their life insurance policy into a lump sum of cash, which can be used for medical expenses, retirement income, debt reduction, or other financial needs. It can be a viable option if a policyholder no longer needs or can afford their policy.
How is the value of a life settlement determined?
The value of a life settlement is determined based on several factors, including the policy’s death benefit, the insured’s life expectancy, the premiums required to maintain the policy, and the policy's cash value.
What happens after the life settlement is completed?
Once the life settlement is finalized, the buyer becomes the new owner and beneficiary of the policy. The policyholder receives the agreed-upon lump sum payment, and no further premiums are required from the policyholder.
How long does it take to complete a life settlement?
The process of completing a life settlement typically takes 6 to 12 weeks, but it can vary depending on the complexity of the policy and the time needed to evaluate the offer.
How do life settlements benefit policyholders?
Life settlements provide a lump sum cash payment to policyholders who may no longer need their life insurance policy. This cash can be used for a variety of purposes, such as medical expenses, retirement income, or paying off debts.
Are life settlement proceeds taxable?
The tax implications of a life settlement vary. The proceeds may be subject to income tax, depending on the policy's cost basis, amount received, health of the seller and what the funds are used for.
Policyholders should consult with a tax advisor to understand the potential tax impact.
Can I reverse a life settlement once it's completed?
No, once a life settlement is finalized, it cannot be undone. It’s important for policyholders to fully understand their options before proceeding with the sale of their life insurance policy.
Once a change in ownership is confirmed, the policyholder has a 15 day right to recession. Compensation is paid after the recession period, and at that point cannot be reversed.
What are the costs involved in a life settlement?
There are typically no out-of-pocket costs to the policyholder. However, the broker or life settlement provider may charge a commission or fee, which is typically paid out of the settlement amount. The policyholder should always understand the fee structure before proceeding.
Will I still have to pay premiums after selling my life insurance policy?
No, once the policy is sold in a life settlement, the buyer assumes responsibility for paying the premiums. The policyholder is relieved of any future financial obligations related to the policy.
How does a life settlement compare to surrendering a policy to the insurance company?
Surrendering a policy to the insurance company typically results in a lower payout, as the insurance company will offer the policyholder only the policy's cash value. A life settlement often provides a higher payout, as it involves selling the policy to a third party who is willing to take on the policy's premiums in exchange for the death benefit.
