Frequently Asked Questions
What is a Life Settlement?
A life settlement is the sale of a life insurance policy to a third party for a cash payout. The buyer takes over premium payments and becomes the beneficiary of the policy. Life settlements provide a way to monetize a policy you no longer need, turning what might otherwise lapse into immediate financial value.
Can I Sell my Policy if I am not 65 yet?
Yes, under certain conditions. A Viatical Settlement allows those that are younger than 65 to sell their policy. To qualify for a Viatical Settlement, the policy owner must be diagnosed by a physician with a severe or terminal illness that causes a person to pass away within 24 months.
What are the Tax Implications for my Policy?
For Viatical, if the person qualifies based on the IRS guidelines, there is usually no taxes. For a non-Viatical settlement, there is possibly taxes due for the amount above how much you paid in monthly premiums.
What Type of Life Insurance Policies are Qualified?
Whole life, universal life, and term policies with a convertible are qualified for a life settlement. For Viatical Settlements, regular term policies are considered on an individual basis.
What are the Benefits of Selling my Policy?
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Eliminate ongoing premium costs.
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Access immediate cash for retirement, medical expenses, or debt repayment.
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Avoid letting a valuable policy lapse without realizing its full potential.
Disclaimer: This information is for general informational purposes only and should not be considered tax advice. Tax laws and regulations can vary and are subject to change. We strongly recommend consulting with a licensed tax professional to understand your specific situation and ensure compliance with applicable tax laws.
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