In the past, individuals had limited options when it came to disposing of their unneeded or unwanted life insurance policies. If an insurance policy was no longer necessary, an individual was forced to sell it back to the original insurer for its current surrender value, normally just a small fraction of its face value. The other alternative was to stop paying premiums and allow the policy to lapse, thereby losing all of its value.
Today, you have more options, including a Life Settlement, which is the ability to sell your policy to the highest bidding institutional investor.
TRG is here to help you capture the value in your policy.
With our powerful background in life insurance, we understand the complexities involved in the Life Settlement process. In addition to our full range of insurance solutions, we can help you:
- Explore an innovative new strategy that allows institutions to bid on your life insurance policy
- Convert unneeded or expensive life insurance policies into cash
- Generate significant settlements to pay for current financial needs
The Benefits of Life Settlements
The Life Settlement market allows you to get cash for your life insurance policies today. This is because life insurance is now viewed as a saleable financial asset like your home or retirement account. A Life Settlement can help:
- Provide additional flexibility in retirement and estate planning
- Provide capital to purchase a more efficient life insurance policy
- Offset costs of long term care and other types of elder care
- Inject much needed cash into your business
- Improve the quality of your life today
When is the Right Time for a Life Settlement?
Financial needs and goals change over time. What may have once been the right insurance solution may no longer be ideal for your current stage of life or financial position. Life Settlements can be a powerful option to improve the quality of your life. Explore your Life Settlement options when:
- Family needs change
- Planning retirement
- Current liquidity needs arise
- Health status changes
- Premiums are too expensive
- Estate tax laws change
- Business changes
- Key-person policy needs change
- Current life insurance policy underperforms
- Death of beneficiary
- Expiring Term Life insurance policy
Life Settlements can generate significant amounts of cash in the open market and provide much needed security today. Proceeds can be used to address any current financial needs, including using the capital to purchase a more efficient policy or to pay for all types of elder care.
Who Is Eligible?
While there are several types of life insurance policy types that are eligible for a Life Settlement, there are a few parameters that must be met to explore the potential for a settlement. The ideal Life Settlement candidate typically meets the following criteria:
- Insured is over the age of 65
- Face amount of the policy is over $250,000 (including term life insurance and all other types of life insurance)1
- Has a relatively low annual premium payment compared to overall value
- Insured has experienced an adverse change in health over the years
- Policy is over two years old and outside of the contestability period
Life Settlements are not right for everyone and should be evaluated on a case-by-case basis. There are risks involved in the process and TRG can help you examine your policy eligibility. It is important to note:
- The sale of a policy may be a taxable event and could be viewed as income or a capital gain-you should always consult a tax specialist to discuss specific implications
- Could alter qualification for certain government subsidies
1 To be eligible Term Life policies must be convertible into a permanent policy
Working with TRG
The unique depth of experience and expertise with life insurance makes TRG ideally suited to help you explore your Life Settlement options and solutions. We make the following commitment to all our Life Settlement clients and partners:
- We will meet with each client individually to evaluate their needs and help determine whether they can benefit from a Life Settlement
- We work with the right institutions and put all the checks in place to ensure a smooth and easy process
- We will provide the attention, information, and counsel to every client to achieve the best results in each situation
The TRG Life Settlement Process
Explore your potential for a Life Settlement with our no cost, no obligation process:
- Application: a simple form to evaluate your current situation
- Information Gathering: health and medical records, life insurance policy information, and life expectancy reports
- Shop the Policy: auction the policy to institutional investors who make competitive offers
- Close: closing documents to change policy ownership and receive payment. Once the policy has changed ownership, individuals are no longer obligated to make premium payments
The Life Settlement Timeline: A Simple Process
The TRG Life Settlement process is smooth and easy for both you and your clients. We have relationships with dozens of providers, institutional investors, and private investors. Typically a Life Settlement can take just three to six months and greatly improve clients’ financial situations. You and your clients can explore their potential for a Life Settlement with our no cost, no obligation process:
|2 Information Gathering|
|3 Shop the Policy|
Mr. & Mrs. Doe
- Both are 80 years old and each has a universal life policy that total $500,000, set up when their children were young
- With the children (and grandchildren) long grown and with plenty of assets in their overall portfolio, these policies were just not as crucial to their financial well-being and legacy
- Yet talking to the insurance company, they found that the two policies had a cash surrender value totaling just $50,000
Exploring a Life Settlement, the Smith’s obtained offers totaling $185,000 (nearly 3.5 times the surrender value) for the two policies and were able to use the cash infusion to significantly impact the quality of their lives.
- A 75 year-old retired business owner who owns two life insurance policies totaling $4 million that he originally purchased at the height of his business
- Although he still wants the insurance benefits, his current policies come with annual premiums totaling $367,000
- In an effort to reduce premiums without sacrificing his death benefits, he settled his current life insurance and used the cash to help purchase a new, less expensive life insurance policy with the same $4 million death benefit
- Shopping the policies together, a Life Settlement offer came in at $900,000, which was available to roll into a new policy
Mr. Jones purchased the new policy with the same death benefit and annual premiums totaling $257,000-a premium savings of $110,000 per year!
- Age 69 with a universal life insurance policy with a face amount totaling $1,000,000
- This policy carries a cash surrender value of just $40,000, well below her current needs
A Life Settlement offer came in at $350,000 based on the policy and her current health, representing a huge increase over the surrender value and greatly improving her financial standing.
Note: Case Studies are for illustrative purposes only and do not represent actual results of any Life Settlement.
Partnering with TRG
TRG is dedicated to serving and supporting our partners and clients in the Life Settlement business. The Life Settlement market is a rapidly growing industry and is projected to grow more than ten-fold to over $160 billion over the next several years.1 The Life Settlement business provides powerful new revenue opportunities for industry participants and strategic partners. TRG works with top-tier attorneys, CPA’s, and other financial industry professionals to help deliver the widest range of options to their clients. The advantages of working with TRG include:
- Industry Expertise: with our background across the insurance industry, we understand the complexities involved in every step of the Life Settlement process
- Marketing Support: we provide detailed materials and are always available to explain topics and explore options
- Individual Service: we are always available to help both partners and clients discover the best solutions for each clients’ individual needs
- Powerful Relationships: our strong relationships with providers and institutional buyers help our partners and clients uncover the best Life Settlement solution
1 Bernstein Research Report: Life Insurance Long View – Life Settlements Need Not Be Unsettling
- Chapter 7 Bankruptcy Cases (PDF)
- Partner Brochure: Working with TRG: Delivering Life Settlement Options to Your Clients (PDF)
- Client Brochure: Life Settlement Options (PDF)
Disclosures TRG Companies, LLC’s and TRG Insurance, LLC’s Life Settlement Disclosures 1. There are possible alternatives to life settlement contracts, including any accelerated death benefits or policy loans that may be available to you within your life insurance policy. An accelerated death benefit provides immediate cash, typically by paying some of the policy’s death benefit before the insured’s death, for those insureds that are within 1-2 years of death. It may be a way for you to get cash from a policy without selling it to a third party. Also, if you have cash value in your policy, you may be able to use some of it by requesting a loan to meet your immediate needs and still keep your policy in force for your beneficiaries. You also may be able to use cash value as security for a loan from a financial institution. 2. This policy will remain in force on the insured’s life after the sale. Because the policy will remain in force, if you wish to purchase additional life insurance coverage, then the amount of insurance for which you qualify may be reduced. 3. Any monies that you receive in the sale of your policy, in excess of the premiums paid on the policy, may be taxable currently. If you retained the policy, the proceeds upon death would typically be paid to the beneficiaries free of income tax. Please consult with your tax advisor to determine what the taxable event will be, if any. 4. We recommend you consult with an independent attorney and/or accountant to understand the legal and tax ramifications of this transaction. Although TRG Companies, LLC and TRG Insurance, LLC (collectively “TRG”) employs Bradley K. Feldman, an attorney licensed to practice law in the state of Michigan, Mr. Feldman is not currently practicing law and does not provide legal advice. 5. Proceeds of the life settlement could be subject to the claims of creditors. 6. While you may know the identity of the immediate purchaser(s) of your life insurance policy, there is no assurance that the purchaser(s) will not later transfer the policy to other unknown persons. 7. All medical, financial or personal information solicited or obtained by TRG about an insured, including the insured’s identity, or the identity of family members, a spouse or a significant other may be disclosed as necessary to effect the life settlement contract between you and the purchaser. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share this information. As such, the insured may be contacted in the future by either the purchaser or its authorized representative for the purpose of determining the insured’s health status. This contact is generally limited to once every three months following the date the life settlement proceeds are released to you if the insured has a life expectancy of more than one year, and generally no more than once per month following such date if the insured has a life expectancy of one year or less. 8. The insured will need to fully disclose all of his/her medical information, including physicians, hospitals, medication and any and all other medical facilities as part of the life settlement application process. A failure of the insured to fully disclose this information may have an impact on the life settlement offer. 9. Various states require that a Life Settlement agent maintain a license to help you sell your policy(ies). It is recommended that you consult with your attorney and/or other professional advisor regarding whether there are any licensing requirements in your state. Notwithstanding the applicability of any licensing requirements, TRG Insurance, LLC and Eric S. Rosenfeld are licensed to sell life insurance, securities, and other insurance products in numerous states. 10. Receipt of the proceeds of a life settlement may adversely affect your eligibility for Medicaid or other government benefits or entitlements, and advice should be obtained from the appropriate government agencies. 11. Entering into a life settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy, to be forfeited by the seller. 12. TRG and/or its referral sources may receive a commission on the sale of your life insurance policy(ies). Various states require disclosure of this compensation at the time of the sale. It is recommended that you consult with your attorney and/or other professional advisor regarding whether there are any disclosure requirements in your state. 13. It will be necessary at the time of closing for any and all beneficiaries to relinquish all rights and interest that they may have in the life insurance policy. 14. An independent, third party escrow agent will be used on most transactions to facilitate the life settlement closing. 15. The life settlement proceeds will be sent to you after the expiration of the rescission period applicable in your state or within three (3) business days after the provider has received the insurer or group administrator’s acknowledgment that the ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated, whichever occurs later. It is recommended that you consult with your attorney and/or other professional advisor regarding the applicable rescission period in your state. 16. Rescission, if exercised by you, is effective only if both notice of the rescission is given and repayment of all proceeds and any premiums, loans, and loan interest to the provider is made within the rescission period. If the insured dies during the rescission period, the life settlement contract is deemed to have been rescinded, subject to repayment being made the life settlement provider within the rescission period of all life settlement proceeds and any premiums, loans, and loan interest.