Important Features
Your objective: the cash
In a completed transaction, the Policyholder gives up his rights to the policy (e.g. the death benefit) and in return is paid a lump sum dollar amount to which he has agreed. The Policyholder can use the cash for anything he needs or desires. The Insured (the person on whose life the policy was written) remains the Insured under the policy. The Investment Fund who now owns the policy, pays the premiums needed to keep the policy in force, and collects the death benefit upon the Insured’s passing.
Our objective: maximizing the price for you
We achieve this when we can create an “auction” amongst many interested and qualified Providers (licensed financial firms that represent Investment Funds.) A Provider’s basic objective is to pay as little as possible for a policy. But an auction pits Provider against Provider, driving up the price. A Policyholder runs the risk of being “low-balled” when he approaches a Provider (buyer) directly. TV ads for life settlements are typically from Providers that hope to purchase policies at a minimum cost.
No out-of-pocket costs to client or advisors
Neither our clients nor their advisors will incur any out-of-pocket cost for us to take the policy to market. We are paid only upon our client’s satisfaction and a completed transaction.
Policyholders are not required to sell
Policyholders make the ultimate determination whether to sell or not, even after we’ve gone to market. For example, the Policyholder may be dissatisfied with the price, or in the interim may have found a better alternative to selling, He has no obligation to sell. In fact, in many of the states that regulate Life Settlements, the law provides the seller with the option to undo the transaction within a certain period (“Rescission Period”) even after he’s signed the contracts and/or has received the purchase price. Check with us for details.
Timing
One should expect that the entire Life Settlement transaction may be completed within 8 to 12 weeks. Sometimes we are fortunate to close even faster. However, we always counsel our clients to avoid definite expectations as to timing, and certainly not to rely on the receipt of cash proceeds by a certain date to cover expenses. If anything is true in this field, it’s that every case is different, and we sometimes come across issues that cause delay while we, as the Broker, do what’s necessary to solve them.
Our fees
We charge a percentage of the (gross) purchase price and are paid only upon the successful closing of the transaction. All fees will be discussed and disclosed prior to your engagement with us as Broker.
Taxes
Proceeds from a Life Settlement may (or may not) be subject to tax. Before agreeing to a sale, the Policyholder should understand the tax impacts, if any, by checking with his tax advisor.