Agents and Professionals
What is a Life Settlement?
A Life Settlement is the sale of a life insurance policy to a third party for a value in excess of the cash surrender value but less than the death benefit Life Settlements represent an important solution for a growing number of people who thought they were stuck with a life insurance policy they no longer need. Many people do not realize a life insurance policy is their personal property and can be sold.
- The seller receives cash
- The buyer pays all future premiums
- The buyer receives the death benefit upon the death of insured
Qualifying for a Life Settlement
Working with LPT
You probably have clients that have lapsed or surrendered their policies without knowing that a life settlement was an option. Lapsing a policy leaves your client nothing and surrendering it leaves them with little to no cash value. However policies that qualify for a settlement can typically be sold for up to four times more the cash surrender value. Use the pre-qualify a policy form to see if your client’s policy qualifies for a settlement.
What is the Process
- Submit a life settlement application, medical questionnaire, HIPAA form and an in-force illustration from the insurance company
- LPT will review and qualify the policy. If your policy qualifies, LPT will call you with an informal range of offers
- LPT will obtain medical records and life expectancy report on the insured
- LPT will extend a formal offer
Pre-Qualifying a Policy
Sell Your Client's Policy
The first step is to determine if your client’s policy qualifies for a life settlement. In order to qualify a policy, we need an information sheet, a medical questionnaire and HIPPA, and a current assumption illustration showing level premiums to maturity. Once these requirements are received, LPT will determine if your client’s policy qualifies and determine a potential range of offers. The initial evaluation will take 5 – 7 business days.