May | 2005 | Life Settlement News

May 9, 2005 by Administrator

How does lifetime settlement (life settlement) work as a problem-solving tool?

The number and kind of innovative applications of the lifetime settlement concept have grown rapidly and dramatically since the concept first took shape a few years ago. Strategies focus on businesses and high net worth individuals whose current and future financial planning circumstances have made existing policies no longer necessary.

For example, you may have initially purchased life insurance to achieve the liquidity needed to pay your estate taxes, but changing circumstances may have made your estate highly liquid now. If the money that was to be received at your death were now available during your lifetime, it could be reinvested to maximize asset growth or to purchase alternative risk management vehicles, such as long term care coverage.

If your estate has reduced in value, the resulting estate tax liability will be reduced as well. The amount of life insurance purchased for your heirs to meet this liability may now be more than is necessary or desired. In addition, lifetime settlement proceeds can be gifted to heirs or given to charity during lifetime as a method of reducing your estate, and its resulting taxes, even further.

Perhaps you now have a need to remove your insurance policy from your estate to avoid higher estate taxes. Removing it simply by transferring it from personal ownership to trust ownership may be subject to the three-year “lookback” rule of Sec. 2035. This rule prevents taxpayers from transferring certain assets simply to escape estate taxes. However, a lifetime settlement is considered a transfer for value and is, therefore, not subject to this rule.

Another reason to consider a lifetime settlement is when the policy becomes too expensive to maintain. The problem may be as simple as lower income or premiums that did not vanish because of lower interest rates or company dividends. Also, interest payments on large policy loans will make it expensive to maintain.

Get a free lifetime settlement quote!

Lifetime Settlement Transfer

May 9, 2005 by Administrator

Lifetime settlement is not the surrender of the policy, but a transfer of ownership. It involves the sale of your life insurance policy to a settlement funding company. As a result of the sale the funding company becomes the owner and beneficiary of the policy, assumes the obligation to pay premiums, and ultimately receives the death benefit proceeds. Instead of determining the value of your policy from the cash value point of view, the settlement funding company discounts your policy’s death benefit, based on underwriting criteria and other factors.

Find out the unlocked value in your policy today, fill out or free online evaluation form. If you have have questions or would like to discuss you life settlement options over the phone, please call toll free at 1-888-973-8377.

Senior Life Settlement question

May 6, 2005 by Administrator

What types of senior life policies can be purchased?

Senior Life Settlements can be whole life, universal, convertible term, and 2nd to Die policies. The policy can be owned by an individual, trust, corporation or charitable organization.
Note: Polices must be at least two years old and non-contestable.

Viatical Companies

May 6, 2005 by Administrator

Viatical Companies either purchase secondary market (life insurance policies over two years old) through viatical brokers, or companies (Brokers) that specialize in negotiating these policies for the highest offer on behalf of the policy owner. Life Settlement Pro is an affliate Viatical and Senior Life Settlement Broker.

Viatical brokers are paid a commission for their services. Much like real estate brokers, bond brokers, and stock brokers. The difference being that viatical brokers are paid by the funder and charged with the responsibility of processing the transaction in a more complex way. While a real estate broker or stock broker will “show in” the item they want to sell in a market that is fairly efficient and easy to determine, a viatical broker will prepare the item (insurance file) for sale promoting it’s value that varies greatly between the many funders.

If you have one or more life insurance policies you are interested in selling your, or if you’re are an accountant, financial planner, or estate planning attorney with clients that can benefit from this important financial option, give us a call at 1-888-973-8377 and discuss the opportunities available both you and your clients.

Life Settlement Pro uses licensed viatical brokers that specializes in representing policy owners and the insured on life insurance policies insuring people who suffer from health impairments or are of advanced age – 70 and above with some health issues. These transactions are collectively referred to as a viatical settlement, senior settlement, or life settlement. With the term “viatical” generally referring to an insured who is terminally ill.

Feel free to use our online contact form or call us to begin the application process. We strive to find the highest value for your policy.

Florida toughens regulations on viatical settlements

May 5, 2005 by Administrator

By Kathy Bushouse
Business Writer

TALLAHASSEE · A bill that changes the way Florida regulates viatical settlements — life insurance payouts in which investors buy a stake and collect when the policyholder dies — is on its way to Gov. Jeb Bush.

Under the bill legislators gave final approval to on Monday, viatical settlements will now be classified as securities, which essentially requires more disclosure by the company selling the product and tougher regulation by the state.

State Chief Financial Officer Tom Gallagher said the move protects investors because licensed securities dealers would determine whether the investment is a good fit with the investor.

Securities laws require such an assessment is made of a potential investor’s net worth, investment experience and other factors “so that you don’t get somebody whose retirement money is put at risk,” Gallagher said.

Should Bush sign the bill into law, Florida would join 46 other states that regulate viatical settlements as securities, Gallagher said.

While investors may be protected, the move could be harmful to those seeking to sell their life insurance policies, either because they can’t afford to make payments and need money or otherwise no longer need the coverage, said Doug Head, executive director of the Orlando-based Viatical and Life Settlements Association of America.

With increased regulation, the number of companies buying life insurance policies to bring to investors will likely decrease, limiting the number of companies with which policyholders can do business.

“I am concerned that we have lost sight … of the literally thousands of Floridians who have benefited from a viatical marketplace, who have been able to sell their policies,” Head said.

The bill’s passage comes almost a year to the day after Fort Lauderdale-based Mutual Benefits Corp. was shut down by federal and state regulators who alleged the viatical settlements company defrauded as many as 29,000 investors. The company has repeatedly denied the allegations, and the case is still pending in federal court.

Life Settlement Pro does not deal with viatical investing or putting together viatical investors. However, if you have questions about any viatical related subjects one of our consultants would be glad to assist you. Please call us toll free at 1-888-973-8377.