The term life settlement is synonymous to the terms senior settlement, lifetime settlement, and high net worth transaction. These types of settlements are highly rewarding to seniors who do not want their life insurance policy or cannot pay for it any longer. These policy owners can then liquidate a policy for more money than what they would get if they surrendered the policy and got the cash value, but less money than its net death benefit. Life Insurance settlements are a lucrative option for seniors when they are planning the finances of their estate because monthly premiums no longer have to be paid, income is gained to enjoy retirement, and funding is retrieved from a non-performing asset to be used in other investments.

To speak with a life settlement professional today, call 1-888-973-8377 or email us.

A “Life Settlement” is a lump sum settlement paid to the owner of a life insurance policy by one of many funding sources in exchange for the ownership of the policy. Never before have non-terminal policyholders been able to receive capital in excess of their policy’s cash or surrender value to increase their wealth.

Generally, anyone over age 70 who has $100,000 or more in life insurance coverage may qualify for a Life Settlement regardless of health condition. Other factors considered in the negotiations are the policy’s cash surrender values and the cost of premiums. A basic principle to remember is that the older the age of the insured and/or the more health complications exist, the higher the settlement.

The fundamentals of the Life Settlement transaction have technically been around since 1989 in the form of “viatical settlements”. Individuals at any age can qualify for a viatical settlement if they have a chronic or terminal illness such as cancer or HIV. Viatical Settlements have always been contingent upon the health of the insured, whereas Life Settlements are contingent mainly upon the age of the insured. In most states a terminally ill senior applicant will need to use a licensed viatical broker and/or funder in order to abide by state rules and regulations and to retain the tax-exempt status on the settlement.

According to industry reports, Life Settlement proceeds are tax-free up to the cost basis (premiums paid since policy inception). They are taxed as ordinary income from basis to cash surrender value and proceeds above the cash surrender value are taxed as capital gains. Trinity Financial is not a licensed tax consultant and recommends all applicants consult their tax advisor to address any tax concerns.

Once the Life Settlement change of ownership has been recorded with the insurance company and the policy holder has received their money, the Life Settlement funding source will continue to pay premiums throughout the life of the insured. All types of life insurance qualify including group, term, whole-life, universal, survivorship and key-man policies. Trinity Financial provides this service free of charge and there is no obligation to accept a settlement at any time.

Source: Trinity Financial Services, a life settlement broker

How does a life settlement work?

The insured or the contract owner if different than the insured submits an application through or website or be calling Life Settlement Pro. We will obtain an in-force illustration of the policy from the issuing insurer showing the face amount and any outstanding loans and premiums due.

Life Settlement Pro will obtain copies of the insured existing medical records from the insured physicians, or your agent will provide them to us. No medical exam is necessary for the insured. We review the records to determine if the insured meets our guidelines in order to receive the highest offers on the policy.

Once an offer is made and accepted, the life settlement transaction is documented and it proceeds to closing. An escrow account ensures that the policy owner receives the purchase price offered. The policy seller has the right to rescind the transaction within 15 days of the receipt of funds so long as the purchase price and any premiums paid by the funder/provider are returned prior to the end of the recision period.

A life settlement is also known as a Life Insurance Settlement, Senior Settlement, and a Senior Life Settlement.