Policy Owners

WHAT IS A LIFE SETTLEMENT?

A life settlement provides a cash payment to an insurance policy owner in exchange for their policy ownership and beneficiary rights. It is the sale of a life insurance policy to a third party; an investor. Some states utilize the term Viatical Settlement interchangeably with Life Settlement, while other states only utilize the term Viatical Settlement when only when referencing a settlement involving a person with a chronic illness, being unable to perform at least two activities, or a terminal illness, which is generally expected to result in death in twenty-four months or less. When the Owner of the life insurance policy sells the policy, they gain a cash benefit in excess of the policy’s surrender value, but which is less than its face value or death benefit. As a Life Settlement Provider, Montage Financial Group facilitates the sales process, bringing the investors and the policy sellers and/or their representatives together in the marketplace.

WHO MIGHT BE A CANDIDATE FOR A LIFE SETTLEMENT?

  • An ideal candidate is usually 65 or older. If the insured is younger than 65, then the insured likely has a serious or life-impacting medical condition.
  • A policy owner whose premium payments have risen to levels they can no longer afford and the policy is in danger of lapse or they are considering surrendering the policy.
  • A policy owner whose estate planning needs have changed.
  • A policy owner who is considering selling a policy to fund long‐term care.
  • A policy owner who wants to enter into a new, better-performing insurance contract and can use the settlement payment to help fund the new policy.
  • A policy owner who, due to divorce, death of a spouse or other primary beneficiary, business dissolution, or company retirement, may no longer want or need their coverage.

ADDITIONAL FACTS ABOUT LIFE SETTLEMENTS

  • After a policy owner settles their policy, they would no longer be responsible for the premium payments. Upon settlement, the third party investor would maintain the premiums.
  • The purchaser or third party investor will receive the insurance benefit proceeds upon the insured’s death.

IN ADDITION TO MONTAGE FINANCIAL GROUP, WHERE CAN POLICY OWNERS LEARN MORE ABOUT LIFE SETTLEMENTS?

  • Life Insurance Settlement Association – lisa.org LISA is an association dedicated to consumer protection, education, awareness and bringing licensed life settlement industry professionals together.
  • Visit your local state Department of Insurance website to see if they offer information or guidelines concerning life settlements in your state.

WHAT ARE SOME WAYS THAT POLICY OWNERS MAY USE PROCEEDS FROM A LIFE SETTLEMENT?

  • Supplement retirement income
  • Investments
  • To purchase long-term care insurance or fund immediate long-term care needs
  • Create capital for new business opportunities
  • Payoff debt
  • Provide educational funds for children or grandchildren or other charitable giving
  • Pay for medical bills
  • Anything! Remodel the kitchen, take a cruise

WHAT TYPE OF LIFE INSURANCE POLICIES TYPICALLY QUALIFY FOR A LIFE SETTLEMENT?

  • Universal Life
  • Term
  • Survivorship, either Second‐to‐die OR First‐to‐die
  • Whole Life
  • Permanent Life
  • Group Life

WHAT IS THE PROCESS TO OBTAIN A LIFE SETTLEMENT OFFER?

The owner of the policy and/or the insured complete an application, which includes an authorization to obtain medical and life insurance policy information, which may continue as long as the policy is in force after the policy is sold, as well as some disclosures, which may be specific to your state. After Montage and/or your Broker or Financial Representative have assembled the required data, we will review to try and determine if the policy has value.

Interested in learning more? Call us toll free at: 877‐609‐7700 or email us at: info@montagegroup.com