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
Risks
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