Results vary when life insurance policies are sold for cash. Individual policies, like yours, are bundled into portfolios of investments held by the Institutional Settlement Providers -  the only Life Settlement Investors with whom SeniorLIFE™ works. These case studies are some real examples of potential outcomes of cash for life insurance settlements.  To see what your policy might be worth don’t hesitate to contact us for a confidential, no-obligation life settlement consult.

Case Study 1 – Universal Life Insurance Settlement

• 85 year old woman
• She had in place a $3 million Universal Life policy

The insured was paying an uncomfortable $160,000+ in annual premiums. Given her assets today, she no longer needed that level of insurance coverage.

Solution: This woman received $600,000 more than her policy’s cash value: she received $1,090,000 cash by selling her life insurance policy through the Life Settlement process.

 

Case Study 2 – Term Life (Collateral for Business Loan) Insurance Settlement

• A 69 year-old entrepreneur had a $5,000,000 Business Term Life policy that was used as collateral for a business loan.
• He paid the loan off early with personal funds to improve the position of his company in preparation for sale. 

Solution: After reading an article about Business Life Settlements, this wise business owner had a no obligation consult to assess the value of his unnecessary policy. To his surprise, he received a $1,020,000 offer from an Institutional Provider. Proceeds from the Life Settlement transaction enabled him to reduce the selling price he required for the sale of his business and still exit with the desired cash amount.

 

Case Study 3 – (Buy/Sell Business) Term Life Insurance Settlement

• Two businesswomen, ages 65 and 68, long-time partners of a successful company. They wanted to sell their business and retire.  
• To fund a cross-purchase buy/sell agreement, each partner owned a $3 million Term Life policy on her partner. 
• The market for their business had deteriorated materially – potentially affecting their ability to retire as they had hoped.

As part of facilitating the sale of their business, their financial advisor suggested that instead of allowing the policies to lapse and getting nothing, they could sell their policies to Institutional Providers. The potential cash they could receive for their life insurance policies might offset the shortfall they would experience in the marketplace for the sale of their business.

Solution:  By coordinating the sale of their company with the sale of their buy/sell business life policies, their financial planner was able to secure almost $600,000 more cash for each. The owners were able to quickly sell their company and accept what the market offered because the Life Settlement proceeds provided the extra money they needed to fill the gap between the selling price and what they hoped to receive.

 

Case Study 4 – Key-Man Insurance Settlement

• 70 year old man
• He owned his corporation and had a $3 million converted Key-man policy.
• The corporation was responsible for the annual premium of $95,000.
• The policy’s cash surrender value was $28,600.

The corporation wanted to commit financial resources to a business expansion but also wanted to keep the coverage.

Solution: Through the Life Settlement process, the corporation was able to secure $600,000+ cash for the Key-man insurance policy and used some of that cash settlement to bring the premium of a new policy down 20% and had some additional funds to commit to the business expansion.

 

Case Study 5 – Universal Life Insurance Settlement

• 72 year old man
• He had a $4 million Universal Life policy

The insured was planning to take the cash surrender value of $540,000 because he no longer wished to fund the policy.

Solution: The client looked into the prospect of receiving cash for his life insurance policy and ultimately received almost twice the cash surrender value, or $1,052,000, in a Life Settlement. He was able to contribute some of this “found cash” to his alma mater and received a significant charitable income tax deduction

 

Case Study 6  – Key-man Insurance Settlement

• 67 year old man
• He was a business owner who was ready to retire.
• He had in place a $500,000 dispensable key-person policy.

His financial planner suggested he consider selling his Key-man policy for cash instead of accepting the $25,000 cash surrender value of the policy.

Solution:  Because of his financial planner’s advice, this businessman had a free insurance policy consult and subsequently was able to retire with $75,000 more than if he had surrendered his policy.  Thereafter, he invested the $100,000 cash he received in the Life Settlement transaction in a way that he and his financial planner thought better met his retirement goals.

 

Case Study 7 – Survivorship Universal Life Insurance Settlement

• A husband and wife, 80 years old and 78 years old, respectively
• They owned a $3.5 million Survivorship Insurance policy

The couple were in the process of re-working their estate planning and no longer needed the coverage for their Trust.  Their policy’s cash surrender value was $200,000.

Solution: They received several offers from Institutional Providers and settled their insurance policy in just over 35 days for $575,000 cash or $375,000 more than if they had surrendered their policy.

 

Case Study 8 – Key-man Insurance Settlement

Three partners ready to sell their business and retire.

Their company owned three $1 million Universal Key-man Life contracts for with cash surrender values of $200,000 each.

Solution:  As part of preparing for the sale of the business, their financial consultant recommended they liquidate those expendable business assets by selling them for cash.  They settled for $600,000 each and used the proceeds to retire a business loan, thereby enhancing the company’s fundamentals in preparation for a quicker and more profitable sale.

Case Study 9 – Universal Life Insurance Settlement

• A 79 year old man
• He had two Universal Life policies totaling $2.1 million
• The annual premiums he paid on both policies totaled $61,065.00.

The insured wanted to reduce his annual premiums while maintaining a more appropriate level of coverage.

Solution:  The client used a portion of the $610,000 cash he received for his life insurance policy to purchase a new $1 million single-premium Universal Life policy. (He saved tens-of-thousands in annual premiums but still found the coverage he sought and could afford.)

Case Study 10 – Term Life Insurance Settlement

• A 69 year old man
• He had a 10-year, $10 million Term policy

The insured’s premium was about to increase significantly and he was going to let it lapse.

Solution:  The client was able to receive $1,450,000 cash for his life insurance policy through a Life Settlement purchased through an Institutional Provider, which he used to purchase a retirement home in Hawaii.

 

Each case is unique.  These case studies are some real examples of potential outcomes of cash for life insurance settlements.  To see what your policy might be worth don’t hesitate to contact us for a confidential, no-obligation life settlement consult.

 

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