If you have a client who’s considering a life settlement, chances are you have some research you’re doing. It’s not always clear whether a life settlement is in the best interest of your client, or even whether a life insurance policy will qualify for this kind of financial solution.
That’s why we at the Ashar Group decided to try to make it a little easier to see whether a life settlement might be possible for your client. We put together a quick, seven-question quiz that you can take, and all you need is a few simple details about your client’s life insurance policy.
Here’s how it works. But remember: this is just a basic tool to help you decide whether or not to go further with the life settlement inquiry process. If your client is very interested, you can always call us at 800-384-8080 to discuss the policy, and get a more detailed view of your client’s options.
Age of Policyholder
First, we ask you the age range and gender of the policyholder. Pretty simple, right? To qualify, policyholders should generally be over the age of 65. This is why life settlement proceeds are generally used to boost retirement savings, fund long term care, or help make a lifelong dream come true—these are generally the sorts of needs that people who sell their life insurance policies want to fulfill.
Medical Condition
This question pertains to the individual’s health—is the policyholder healthy, or do they have any serious medical conditions? Have they had a change of health since the policy was issued? We ask this because ideally, a person whose policy qualifies for a life settlement has had some kind of health change since issue, and a median life expectancy of 15 years or less.
Smoker or Non?
Just tell us whether the insured was a smoker at the time of the policy issuance.
Policy type
Here, tell us what kind of life insurance policy your client owns. Is it Joint/Survivorship? Whole Life? Term Life? These and other types of policies may be eligible for a life settlement depending on additional factors. The most likely policies to qualify are Universal Life, Term Life, Whole Life, or Joint Survivorship with one deceased. The value of these policies are generally between $100,000 and $5,000,000, although policies valued at $25,000 to $1 million may be eligible for Long Term Care settlements.
Cash Surrender Value
We ask you how much the current cash surrender value is. This is because policies with lower cash values are more likely to qualify for a life settlement solution.
However, there are some cases in which higher cash value policies can be sold strategically. For example, if the policy is a Universal Life policy with heavy cash value, sometimes the best thing to do is pull the cash from the policy, and sell the remainder. At Ashar, we’re happy to advise clients on the wisdom and timing of that approach after doing our policy analysis.
Loans on the Policy
Are there any loans on the policy? This has a significant impact on the probability of whether a policy will qualify.
Premium Rate
Finally, we ask how high the premiums for the policy are. Lower premiums increase the likelihood that a policy will qualify for a life settlement.
We hope this quiz gives you a useful tool to help you decide whether to begin pursuing the life settlement option for your client, but please remember that we at Ashar are always available to discuss your particular situation in more depth. Contact us by email any time, or give us a call at 800-384-8080!