FAQ
Is a life settlement right for me?
Here are some of the most common questions people have regarding life settlements.
What exactly is a "life settlement?"
A life settlement is the sale of a life insurance policy-usually insuring the life of an individual age 65 or older-to a third party for an amount greater than the cash surrender value. Life settlements allow the owner of a policy to obtain a cash payment while the new owner assumes the rights to the policy. The new owner continues to make the premium payments, and therefore receives the proceeds from the death benefit.
Why would I consider the sale of my term, universal life or whole life insurance policy to a life settlement company?
Some of the reasons why you might consider selling your life insurance policy include:
- The life insurance policy is no longer needed or wanted
- The premium payments have become unaffordable
- Considering surrender of the policy for cash value
- Insured qualifies for a new policy which is more affordable than old policy
- The policy was taken out by a business to insure a key employee, and the business no longer needs the coverage it provides
- The policy is about to lapse
- Change in estate planning needs
- Financial circumstances have changed and there is a need for cash now to cover a major purchase or improve quality of life
- Change in life circumstances (such as divorce or death)
How much money will I get if I enter into a life settlement contract?
The amount of money you receive will depend upon a number of factors, including age and medical condition, type of life insurance policy (e.g., universal life, whole life, term), amount of the death benefit, rating of the issuing insurance company, and the amount of premium necessary to keep the policy in force. If your policy has a cash value upon surrender, the amount you receive should be greater than the cash surrender value of your policy.
How is my privacy protected?
Any medical or health-related information is protected under federal HIPAA regulations. At Genesis, we've also implemented strict security procedures to ensure all our clients' confidential information stays that way. Regardless, you should make sure that the company you deal with has systems in place to protect your confidentiality.
Are the proceeds of life settlements taxable?
You should consult your tax advisor or legal professional for additional tax information. While Genesis does not provide tax or legal advice, we will be happy to discuss these issues with your advisor.
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