The most common question we get is ‘Can I retain a portion of my death benfit?’ It is very common to have your need for insurance diminish as you age. Your need for insurance may not go all the way to nothing and often times people are faced with a choice of whether to sell their entire policy for cash or to reduce the face amount through their insurance company.
Can I retain a portion of my death benefit? Do I have to sell the whole policy?
It depends, see if you qualify for a life settlement.
If a need for life insurance coverage still exists in your plan and you are thinking of reducing your coverage, you should have your policy reviewed to see if you are eligible to retain a portion of the death benefit as you complete a life settlement.
Before life settlements came on the scene, few options existed for life insurance policy holders who wished to retain a portion of their life insurance while eliminating all future premium payments. Nonforfeiture laws enable the surrender of the policy back to the life insurance company for a lump sum of cash or allows you to exchange your policy for a reduced paid-up benefit.
The value is determined in advance by your life insurance company and as a consequence your life insurance asset is often undervalued. We have recently launched a new life settlement calculator that will provide you a very general range of what your life insurance policy would be worth as a life settlement.
Retaining a portion could relieve the burden of increasing premium payments while at the same time retaining a portion of the death benefit.
Get your life insurance policy valued to see if you qualify to receive a cash settlement, possibly in addition to retaining a portion of your face amount for your beneficiaries.
Retain a Portion Life Settlement Solution:
- 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.
- Life Insurance Policy Face Value: $1M
- LIfe 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 which is 1-800-727-7654.