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How Life Insurance Settlement Works

Last Updated: January 15, 2014

Guidelines

  • NO Age Minimum
  • NO Policy Size Minimum or Maximum
  • Policy in effect a minimum of 24 months
  • Any form of life insurance can qualify

Q: Can a life insurance policy be used to pay for the costs of senior housing and long term care?

YES! If a policy owner no longer needs, or can no longer afford a life insurance policy, and is considering letting the policy lapse or surrendering it for the cash value - then cashing in a policy through a Life Settlement or the Life Care Assurance Benefit is the right answer.

Q: What is a life settlement?

A: A life settlement is the sale of an in-force life insurance policy by the policy owner to a third party

Q: What is the Life Care assurance benefit?

A: For the owner of an in-force life insurance policy, the Life Care Assurance Benefit program covers the costs of Senior Living and Long Term Care while preserving a death benefit.

Q: Are there any restrictions to liquidate a life insurance policy?

A: A life insurance policy is personal property and the owner is free to transfer ownership for the highest possible value without any restrictions as it is not a loan, nor a government subsidized program, or a long term care insurance policy.

Q: Am I responsible for paying the premiums after I have settled a life insurance policy?

A: No, the entity that purchases your policy will be responsible for paying the premiums and you will be relieved entirely of that responsibility.

Q: What are the rights of a policy owner?

A: A life insurance policy is legally protected as personal property and the policy holder has the guaranteed right to manage and sell their ownership interest in a life insurance policy without limitations-- and at the highest possible value. All insurance policy owners have the following rights:

  • Name the policy beneficiary
  • Change the beneficiary designation
  • Sell the policy to another party
  • Assign the policy as collateral for a loan
  • Borrow against the policy

Q: How does a life settlement compare to other funding options for seniors?

A: A life settlement offers a lump sum payment based on the life expectancy of the policy owner and the value of an existing policy in exchange for transferring 100% of the death benefit to the buyer. There are no restrictions on use of funds, no requirement for re-payment, no upfront fees, no requirements to be below set asset and income levels.

Q: How does the Life Care assurance benefit compare to other funding options for seniors?

A: The Assurance Benefit allows a policy owner to use the policy to pay for the costs of senior housing and long term care directly to the care provider while still preserving a death benefit.

  • Senior Living benefit paid directly to care facilit y/ provider
  • First three months paid in advance
  • Preserves a death benefit over the course of the payout period
  • Provides for a final expense death benefit payment
  • No policy size or age minimum
  • Can be used for Skilled Nursing, Assisted Living and Home Health Care

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