Policy Owners
Individual policy owners
If you are a policy owner and are considering the surrender or lapse of your policy, you'll be happy to know there's a third option that's often more financially rewarding.
It's called life settlements and it's based on the secondary market for life insurance policies which has created a viable market opportunity for policy holders who meet certain parameters.
Despite its simplicity, the life settlement process may ultimately provide you with 3-4 times the cash surrender value of the policy.
Considering that until recently the only opportunity policy owners had was to surrender the policy to the life insurance carrier, it's not surprising that a thriving market for these policies now exists.
Perhaps the policy premiums have become too expensive, or the policy is no longer needed, going to be replaced, or there is a need for cash now. Regardless of what the motivator is, a life settlement should almost always supersede considerations of surrendering a policy or allowing it to lapse.
As an owner, you owe it to yourself to explore these options and see if your current situation falls under the general settlement parameters. Call us today, because when it comes to delivering on the real potential of your policies, Genesis knows.
Businesses
Regardless of their size, the life settlement option represents a unique opportunity for businesses. Companies which obtained a "key man" policy on an executive, manager, or employee, or perhaps a "buy sell" arrangement which was structured on behalf of ownership, may want to evaluate this opportunity.
As these policies are generally term policies, companies often will allow them to lapse, once they have "done their job." Once you understand the unique concept of life settlements, you also understand why this may be a potentially costly error. As these policies are often convertible to universal life policies, the business can create significant liquidity from an otherwise dormant asset; hence they present a real, yet often unknown value to business.
Businesses must discuss with their advisors if the term policies it owns and no longer requires can turn into remarkable revenue for their firms. Imagine the contrast of lapsing a life insurance policy vs. generating perhaps hundreds of thousands of dollars or even more, from an asset that would never have been worth much at all.
Call us today and find out why when it comes to helping businesses like yours find liquidity options they never knew they had, Genesis knows.
Charities
Charitable organizations which own policies gifted to them by donors, can explore the life settlement option on their donated policies in certain situations.
Although these policies were generally donated with the intent that they would ultimately pay out a death benefit to the charity, the life settlement option creates an opportunity for the charity to have an immediate monetary benefit. Obviously a charity obtaining these settlement proceeds can use these funds to continue offering the types of programs which the benefactor was greatly supportive of.
Charities may seek the settlement opportunity for many reasons. For scenarios where the charity is making the premium payments, simple economics may have resulted in a situation where there is no longer capital available to continue making those payments. Charities today find it increasingly challenging to raise funds for current projects so the added burden of premium payments can often be overwhelming. Taking advantage of the settlement option can allow for a large cash influx and relieve the burden of overwhelming premium payments.
To ensure that a decline in fundraising doesn't result in a decline in services, these organizations must look into alternatives for raising critical capital.
In this scenario the life settlement option can create liquidity from an asset which the charity owns. Instead of the selling of a traditional asset-often at "fire sale prices" just to raise much needed funds, the life settlement can provide an immediate infusion of much needed capital to a charity or non-profit, which finds itself in a financially challenging position.
As with all life settlements, the consent of the insured and donor are required.
If the only increases you're looking at are in the services you provide and the funds needed to provide them, call us today. Because when it comes to solutions to compensate for fewer contributions, Genesis knows.
Trusts
Trustees have the ability to have an evaluation done on any life insurance policies the trust owns. As the secondary market continues to grow, increasing numbers of trustees are looking into the settlement option as a means of liquidity.
As the insured ages, premiums increase dramatically. Very often those premiums will become prohibitive for the trust to maintain. Before life settlements entered the financial landscape, many trustees found themselves in the difficult situation of possibly surrendering a policy-obviously not what the grantor originally intended. However, as the times and financial health of individuals change, life settlements may become the best option available.
With the knowledge that the beneficiaries will ultimately profit from the settlement proceeds, trustees should carefully analyze their specific scenario and determine if an evaluation is appropriate.
As the fiduciary responsibility of a trustee may actually require the research into a life settlement, call us today. Because when it comes to the knowledge and resources needed to help trustees address fiduciary obligations, Genesis knows.
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