‘RAP’ (Retain a Portion) Life Settlement Solution: 74-year-old male 

• Life Insurance Policy Face Value: $3M
• Life Insurance Annual Premium: $79,452
• RAP Life Settlement Offer: $25,000 + a retained death benefit of $180,000
• Life Insurance Policy Type: Universal Life Insurance
• Life Insurance Cash Value: $32,152

• Life Settlement Solution: This client was facing financial challenges and was unable to pay his upcoming life insurance premium. His agent opted to explore the market value of his life insurance policy. Because of his age and relatively good health, he could not qualify for a traditional cash life settlement. His only other options appeared to be either simply accepting the policy’s cash value or allowing the policy to lapse and neither of those appealed to him at all.

Only unconventional alternatives would avoid the limited options available. The particulars of his case were forwarded to 20 funders. At the ending of the day there were actually several life settlement solutions. His life insurance appraisal consisted of a cash payment element and a paid up life insurance policy. He ultimately accepted a $25,000 cash payment and $180,000 of paid up life insurance coverage for which he would never have to make another payment

‘RAP’ (Retain a Portion) Case Study #2: 78-year-old male 

• Life Insurance Policy Face Value: $1M
• Ife Insurance Annual Premium: $21,796
• RAP Life Settlement Offer: $50,000 + a retained death benefit of $400,000
• Policy Type: Universal Life Insurance
• Life Insurance Cash Value: $174,188

• Life Settlement Solutions: This client could no longer afford his premium payments, but it was extremely important to him that he be able to maintain some life insurance for his beneficiary. He was not necessarily interested in transacting a life settlement; he wanted to see if there might be a life settlement solution which would allow him to reduce his coverage or obtain a paid up life insurance policy with no premiums. Just the specifics of this case were shipped to 20 funders and they worked aggressively to find the client a life insurance appraisal value comprised of a lump sum of cash out and paid up life insurance coverage going forward.

The life settlement appraisals varied. The client ultimately maintained a $400,000 death benefit to his beneficiary and no longer was required to make premium payments. And although he was not specifically looking for a cash settlement, the client was thrilled that the deal also included a $50,000 cash payment to him. 

Please feel free to contact us with specific questions pertaining to your individual circumstances and questions regarding a Life Settlement Appraisal. You may reach us at 1-800 RAP POLICY or 1-800-727-7654.

Viatical Settlement Case Study# 1: 57-year-old female

• Life Insurance Policy Face Value: $750,000
• Life Insurance Annual Premium: $900
• Viatical Settlement Offer: $405,000
• Life Insurance Policy Type: Universal Life Insurance
• Life Insurance Cash Value: $0 
• Life Settlement Solutions: The client no longer wanted the life insurance policy she’d owned for 16 years, so her agent suggested that she explore its life settlement market value. Because of her age and poor health there were limited funders, but we were able to secure a life settlement appraisal. The client was thrilled to ultimately garner an offer that was $405,000 more than the policy’s cash value.

Life Settlement Example #2: 79-year-old male

• Life Insurance Policy Face Value: $2M
• Life Insurance Annual Premium: $131,718
• Life Settlement Offer: $130,000
• Life Insurance Policy Type: Universal Life Insurance
• Life Insurance Cash Value: $0
• Life Settlement Solutions: The client originally purchased his life insurance policy for estate tax purposes. Now that his estate has decreased, he no longer needs the estate tax life insurance policy. He decided to try to sell his policy directly, but also contacted us to see how high of a life Settlement appraisal number we would generate. The life settlement appraisal was higher than the cash offer for life insurance his agent received from his direct source, providing greater value to the client.

Life Settlement Case Study #3: 67-year old male

• Life Insurance Policy Face Value: $200,000
• Life Insurance Annual Premium: $6,159
• Viatical Life Insurance Settlement Offer: $104,000
• Life Insurance Policy Type: Term Life Insurance
• Life Insurance Cash Value: $0
• Life Settlement Solutions: This client was facing financial distress, and his agent suggested that he consider a life settlement to help him with much needed resources to help pay for living expenses. Given the face amount, there were a limited number of  life settlement funders that would even consider this viatical life insurance settlement transaction, but we were able to find one and at least generate a life settlement appraisal. The eventual life insurance policy sale gave the client much needed liquidity.

Life Settlement Case Study# 1: 77-year-old male

• Life Insurance Policy Face Value: $5M
• Life Insurance Annual Premium: $214,500
• Life Setlement Offer: $800,000
• Life Insurance Policy Type: Universal Life Insurance
• Life Insurance Cash Value: $0
• Life Settlement Solution: The client had taken out a life insurance policy years ago in order to cover the taxes on his estate. His estate no longer required life insurance coverage for tax planning purposes and his life insurance policy had no cash surrender value. He did not want to lose all the money he had paid in premiums over the years, so he decided to pursue a life settlement. We were able to secure a life settlement appraisal that netted the client $800,000.

Life Settlement Case Study #2: 88-year-old male

• Life Insurance Policy Face Value: $1M
• Life Insurance Annual Premium: $81,500
• Life Settlement  Offer: $180,000
• Life Insurance Policy Type: Universal Life Insurance
• Life Insurance Cash Value: $10,786
• Life Settlement Solution: This case involved an 88-year-old male in declining health whom needed money for medical treatment. His agent suggested that he explore a life settlement to see if he could get more out of the policy than just the cash value. Thanks to his agent’s advice, he walked away with a life settlement that was more than 16 times his policy’s cash value, greatly easing the burden of paying for his medical treatment.

Life Settlement Case Study #3: 74-year old male

• Life Insurance Policy Face Value: $3.75M
• Life Insurance Annual Premium: $136,304
• Life Settlement Offer: $610,000
• Life Insurance Policy Type: UL
• Life Insurance Cash Value: $0
• Life Settlement Solution: The client’s estate had decreased, and it had become very difficult for him to pay his life insurance policy premium. He needed to sell the life insurance policy or it was going to lapse. Instead of simply accepting the cash value, he decided to test the market and find out the value of his policy from a life settlement perspective. He was elated to receive a life settlement of more than half a million dollars, especially since his policy had no cash value.

Case Study# 1: 80-year-old female

• Policy Face Value: $1.5M
• Annual Premium: $36,052
• Client Offer: $ 234,000
• Policy Type: UL
• Cash Value: $0
• Summary: The client’s estate had decreased and it had become very difficult for her to pay her annual life insurance policy premium. She needed to sell the policy or it was going to lapse…and her policy had no cash value. She decided to test the market and find out the value of her policy from a settlement perspective, and was thrilled to receive an appraisal of nearly a quarter of a million dollars!

Case Study #2: 82-year-old male

• Policy Face Value: $1.85M
• Annual Premium: $65,100
• Client Offer: $410,000
• Policy Type: UL
• Cash Value: $0
• Summary: This client no longer needed his policy, which was originally purchased for estate tax purposes. The client was able to recoup much of the premium he had paid into the policy over the years.

Case Study #3: 87-year old male and 83-year-old female

• Policy Face Value: $1.65M
• Annual Premium: $59,260
• Client Offer: $360,000
• Policy Type: Survivorship Universal Life
• Cash Value: $119,047
• Summary: During a review of their estate plan/needs, the clients (a married couple) and their agent mutually determined that the SUL policy the clients had purchased years ago was no longer necessary. As this was the first life settlement transaction that the agent had ever attempted, he recommended that the client have it appraised. Even though the policy was a Florida-domiciled SUL, we were able to garner an appraised value that was more than three times the policy’s cash value, far exceeded the clients’ expectations.

Case Study# 1: 79-year-old male

• Policy Face Value: $4M
• Annual Premium: $193,280
• Client Offer: $720,000
• Policy Type: UL
• Cash Value: $0
• Summary: The client had taken out a life insurance policy years ago in order to cover the taxes on his estate. In time, his estate no longer required insurance coverage for tax planning purposes, but his policy had no cash surrender value. He did not want to lose all the money he’d paid in premiums over the years, and decided to pursue a life settlement. The life settlement appraisal and ultimate sale netted the client $720,000, but was also able to relieve the client of an increasingly unaffordable annual life insurance premium payment of more than $193,000.

Case Study #2: 81-year-old female

• Policy Face Value: $2.8M
• Annual Premium: $78,694
• Client Offer: $280,000
• Policy Type: UL
• Cash Value: $181,646
• Summary: This case involved a client who was paying nearly $80,000 per year for her life insurance policy, and was looking for a way to eliminate that expense. Her financial advisor suggested that a life settlement might be a viable way for her to ease the financial burden imposed by her annual premium. She agreed, had a life insurance appraisal and settled on an offer that garnered her almost $100,000 more than the policy’s cash surrender value.

Case Study #3: 82-year-old male

• Policy Face Value: $666,000
• Annual Premium: $37,204
• Client Offer: $128,700
• Policy Type: Universal Life
• Cash Value: $0
• Summary: For the past few years, this client has been gifting away his estate in order to reduce his estate tax exposure. He recently realized that the life insurance policy he purchased years ago for estate planning purposes had been rendered obsolete due to his gifting. Being familiar with life settlements, he decided to secure a life settlement appraisal and test the market value of his policy. The client was able to obtain a settlement worth 19 percent of the policy’s face value. The client planned to gift the proceeds from the sale to his children.

Case Study# 1: 88-year-old female

• Policy Face Value: $900,000
• Annual Premium: $45,495
• Client Offer: $195,000
• Policy Type: UL
• Cash Value: $2,652
• Summary: The client no longer needed this policy, which was originally purchased for estate tax purposes.  The client ultimately accepted an offer that was a whopping 73.5 times greater than the policy’s cash value.

Case Study #2: 78-year-old male

• Policy Face Value: $1M
• Annual Premium: $21,796
• Client Offer: $50,000 + a retained death benefit of $400,000
• Policy Type: UL
• Cash Value: $174,188
• Summary: The client could no longer afford to pay premiums, but it was extremely important to him that he be able to maintain a life insurance policy for his beneficiary. He decided to pursue a senior life insurance settlement to sell his current policy and use the proceeds to purchase a new one. The life settlement appraisal value allowed him to settlement with a new policy that would no longer require him to pay premiums and would also provide a $400,000 death benefit to his beneficiary. And although he was not necessarily looking for a cash settlement, the client was thrilled that the life settlement also included a $50,000 cash payment to him.

Case Study #3: 83-year-old female

• Policy Face Value: $4M
• Annual Premium: $263,021
• Client Offer: $420,000
• Policy Type: Universal Life
• Cash Value: $0
• Summary: This client simply did not want her policy any longer. She worked with her agent to ship the policy directly out to market, without much luck. Her agent suggested they reverse course and begin with a life settlement appraisal to see if we might have more success determining a value of the life insurance policy.

Case Study# 1: 81-year-old male

• Policy Face Value: $750,000
• Annual Premium: $33,072
• Client Offer: $253,000
• Policy Type: UL
• Cash Value: $73,225
• Summary: The client no longer needed this policy, which was originally purchased for estate tax purposes. The life settlement appraisal was more than one-third the value of the death benefit, and more than three times the policy’s cash value.

Case Study #2: 85-year-old female

• Policy Face Value: $1M
• Annual Premium: $36,200
• Client Offer: $160,000
• Policy Type: UL
• Cash Value: $39,230
• Summary: The client’s estate had decreased, and it had become very difficult for her to pay her life insurance policy premium. She needed to sell the policy or it was going to lapse. Instead of simply accepting the cash value, she decided to test the market and find out the value of her policy from a life settlement perspective. She was elated to receive a value of more than three times the policy’s cash value.

Case Study #3: 83-year-old male

• Policy Face Value: $1.5M
• Annual Premium: $74,508
• Client Offer: $305,000
• Policy Type: Universal Life
• Cash Value: $86,196
• Summary: This case involved an 83-year-old male in declining health that no longer needed his life policy, but did need extra cash for medical treatment. His agent suggested that he explore a viatical settlement to see if she could get more out of the policy than just the cash value. Thanks to his agent’s advice, he walked away with a settlement that was more than four times his policy’s cash value, greatly easing the burden of paying for his medical treatment.

Case Study# 1: 79-year-old male

• Policy Face Value: $4M
• Annual Premium: $205,875
• Client Offer: $320,000
• Policy Type: UL
• Cash Value: $14,668
• Summary: This was a corporate-owned policy, which limited the number of funders who were willing to bid on it for appraisal purposes. We aggressively shopped the policy, while the agent was actively shipping the case to several direct funding sources. We secured a life insurance appraisal and the client was pleasantly surprised.

Case Study #2: 88-year-old female

• Policy Face Value: $1M
• Annual Premium: $86,683
• Client Offer: $120,000
• Policy Type: UL
• Cash Value: $2,343
• Summary: The client could no longer afford the premiums. She needed to sell the policy or it was going to lapse. The policyholder and agent were extremely pleased to receive a settlement that was 51 times greater than the policy’s cash value.

Case Study #3: 68-year-old male

• Policy Face Value: $1M
• Annual Premium: $46,786
• Client Offer: $300,000
• Policy Type: Term Conversion
• Cash Value: $0
• Summary: This was a key-man policy. After an executive retired, the owner of the company decided he no longer needed the policy, so he wanted to pursue a settlement. He was happy to be able to recoup some of the premiums that he had paid into the policy over the years.

A viatical settlement is only one of your options, if you have determined you need to access the value of your life insurance policy and are chronically or terminally ill. Beneficiaries and survivor needs are the basis of insurance planning and the original intent of your policy should always be considered.

If you find your quality of life choices limited due to finances, have a need for liquidity to square away your affairs in an effort keep your overall estate from suffering or just want to cruise around the world while you can, a viatical or a life settlement may be the only way to fulfill your wishes.

Please know that often you can sell just a portion of your insurance policy, but in no event should you sell all or a portion of your insurance policy without having it independently appraised. There are insurance agents, life settlement brokers, life settlement providers, individual investors and even unlicensed reps in some states; all willing to talk about viating your insurance policy. Get your own number first and keep it to yourself when you shop.

A Viatical and a life settlement are very similar. Viaticals are for those that have a prognosis of terminally ill. Terminally ill is defined by your state guidelines.. Typically the prognosis has to be less than 24 to 48 months, depending on your state. A life settlement is essentially the same, but you do not meet the definition of terminal. They are underwritten in much the same way, but are taxed differently.

There are often more contractual options for the terminally ill with respect to their insurance policies. It is the chronically ill that have a life expectancy of 3 or more years that find their policy options more limited. In many instances, a viatical settlement is the only option to get needed funds from an insurance policy, in particular if the policy has no cash value or is term insurance.

Currently, about 45 states have laws and statutes around viaticals and life settlements. The added regulations, disclosure mandates and licensing requirements have done much to protect you, the consumer. If your state is unregulated it may be prudent to deal with someone who is conducting business in other states that require licensing.

The Life settlement value of all or a portion of your life insurance policy has to be evaluated and each case is different.
The basic information that goes into arriving at an appraisal range is:

• Age
• Gender
• Health conditions
• Rating of your insurance company
• Type of Policy
• Cash Surrender Value
• Premiums
• State of residence

When you get a viatical appraisal your personal and contact information is treated as strictly confidential. Only your health and insurance policy information is appraised, by comparing and contrasting it against a database of thousands of life settlements that have actually funded. Each case is viewed independently, as even subtle changes in health status can have a major impact on an accurate value of your insurance policy.

Viaticals are certainly not for everyone, but a viatical life settlement may provide you with the needed liquidity you so very much desire. In any event, do not sell all or even a portion of your insurance policy without having it appraised.

A Cancer Viatical Settlement may not be your only option, but being told that you are not sick enough and do not qualify for insurance proceeds or advances can seem like the final letdown. If you are trying to cope with ever changing quality of life issues and expenses, you may find it difficult to find anyone that will advance or loan you money against a hard asset. Most people do not consider their life insurance policy an asset, but it is.

Many life insurance policies offer an accelerated death benefit when you are terminally ill. Unfortunately, most require that your prognosis be only 6 months to a year. Your traditional options are very limited if you are chronically ill with cancer and not terminal… Limited financial options at a time of mounting health costs, increasing premiums and an absolute need for some liquidity. Limited options at a time when you are fighting to not be terminal. Stress levels and attitude do matter.

Unfortunately, the slip in health is the key. When you applied for your individual life insurance policy, you were most likely classified as preferred, standard or substandard to varying degrees. The ‘healthier’ you were, the less you paid for insurance because you were apt to live longer.
Life Settlements and Viaticals are somewhat the opposite. If you are in good health, there is most likely limited value in your life insurance policy as a life settlement, even if you are over 70. However, even if you are only in your 40’s or 50’s and battling cancer, there is a good chance that your life insurance policy may have significant value as a viatical life settlement.

You should always take the time to revisit your plan for the life insurance proceeds you may sell. You purchased life insurance for a reason. But if your current situation dictates that you sell a portion or all of your insurance policy, evaluate the process and get the best price for it.

First, research your rights as provided by the laws of your state and gain a basic understanding of the life settlement process. Remember to always get an independent life settlement appraisal before you shop price. Then plan for the proceeds and consult a tax advisor before you initiate a transaction.

Research: Know your rights and the Viatical laws for your state.
Appraise: Obtain your own appraisal early on.
Plan: Decide what is best for you, using accurate numbers

If you have specific questions about a Viatical and your situation, please feel free to contact us at 1-800 RAP POLICY or 1-800-727-7654.