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 On File