FAQs
Frequently Asked Questions
Abacus Settlements, LLC is committed to establishing long-term working with relationships with producers, brokers, financial professionals and investors. Based on our years of experience and success, we believe that building trusting relationships begins with a strategic partner who understands your needs – a provider who delivers and who you can count on.
What Is a Life Settlement?
Why Would I Consider a Life Settlement?
How Much Will I Receive?
Does My State Allow Life Settlements – and Are They Regulated?
What Types of Policies Qualify to Be Sold?
Are There Restrictions On What I Do With Life Settlement Sales Proceeds?
Who Holds the Policy After It’s Sold?
What Is a Life Settlement?
A: A Life Settlement is the sale to a third party of an existing life insurance policy insuring the life of an individual who does not have a catastrophic or life threatening condition and who fits specific eligibility parameters. The proceeds from the sale would be an amount greater than the current cash surrender value of the policy but less than its net death benefit. The industry also uses a the term “Viatical Settlement” for a transaction involving insureds with a catastrophic or life threatening condition.
A catastrophic of life threatening condition is an illness or physical condition which can reasonably be expected to result in death in twenty-four months.
Why would I consider a Life Settlement?
A: An insured individual may want to consider a Life Settlement if surrendering or lapsing policy is in question, insurance needs have changed, beneficiaries have been outlived, premiums have become unaffordable, estate taxes are changing, cash is needed to meet an emergency, or the insured wants additional monies to fund new investments.
How much would I receive with a Life Settlement?
A: The proceeds from the sale would be an amount greater than the current cash surrender value of the policy but less than its net death benefit – based on a number of factors that may include age, medical condition, type of policy currently held, rating of the issuing insurance company and the amount of premium payments necessary to keep the life insurance policy in force.
Does my state allow Life Settlements – and are they regulated?
A: Life Settlements are legal in every state. At this writing, Life Settlement legislation has been enacted in approximately 28 states, while 39 states have drafted Viatical Settlement legislation. Check state-by-state licensing laws to learn more about Life Settlements where you live.
What types of policies qualify to be sold?
A: While most types of life insurance policies may qualify, the most common are Whole Life, Universal Life and convertible Term Life.
Are there restrictions on what I may do with Life Settlement sales proceeds?
A: No, none at all. In addition, a large and growing number of individuals have found the proceeds an excellent way to enhance financial well-being and peace of mind by expanding their portfolio with new/additional investments that meet their financial profile.
Who holds the policy after it has been sold?
A: The policy is transferred to a new owner who names a new beneficiary of the policy. In turn, that owner collects the proceeds upon the passing of the insured individual. Once, the sales transaction has been executed, you are no longer responsible for making premium payments or maintaining the policy.
