Joint and Survivorship
Policy…Joint & Survivorship
Insured’s…Husband age 75, Wife age 71
Face Amount…$3,000,000
Premium…$67,000
Cash Surrender Value…. $145,000
Life Settlements Offer… $505,000
The couple had purchased this policy to cover their Estate Tax Liability. With a change of circumstances and sophisticated estate planning, they no longer had an estate tax burden and, hence, no need for this policy. The offer from the life settlement was over 300% greater than the cash surrender value offered by their insurance company.
Lapsed Policy
Insured… Male age 79
Policy….Universal Life
Face amount…$500,000
Premium…. $37,000
Cash surrender Value… Zero
Life Settlement offer…$125,000
The insured could no longer afford the costly premium and was about to let the policy lapse. His financial advisor suggested seeking an offer in the secondary life insurance market place --- life settlements. He discovered the policy had value and the insured was offered $125,000.
Business Acquisitions
Insured… Four Business Executives
Policies… Universal Life
Face Amounts… $1,450,000 each
Premiums…. Averaged $78,000
Cash Surrender Value… Averaged $150,000
Life Settlement Offer…Averaged $255,000
When the Mega Company acquired the Little Company, it also acquired the four Key-Man life insurance policies owned by the Little Company. Mega Company paid Little Company the cash surrender value of these polices as part of the acquisition. Mega had no need to keep these policies in force. They received a $255,000 offer from a life settlement offer. This far exceeded the surrender value offered by the insurance company that issued the policies.
Term Policy
Insured….Female age 65
Policy… Term Insurance
Face Amount…$250,000
Premium.... $2,100
Cash Surrender Value …0
Life Settlement Offer…$53,000
The insured no longer needed her term insurance policy and was going to let it lapse, thinking it had no value. She learned her policy was convertible to a Universal policy, making it a candidate for sale in the life settlement market. The insured converted the policy to a Universal policy and paid one premium of $4,300. The policy was then sold in the life settlement market for $53,000.
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