Last Updated: November 13, 2014
- Age Minimums apply
- Policy Size Minimums apply
- Insurance Company credit ratings apply
- Policy in-force a minimum of 24 months
- Typical time to complete 3-6 months
Q: What is a Life Settlement?
A: A life or viatical settlement is the sale of an existing life
insurance policy to a third party investor for more than its cash
surrender value, but less than its net death benefit. In exchange
for paying the purchase price to the seller as well as assuming
responsibility for future premiums, the buyer of the policy will
own the policy and receive the full death benefit when the original
insured dies. More than 40 states regulate life and viatical
settlement transactions to protect individuals that are selling
their insurance policies to third party investors.
Q: What is a Medicaid Life Settlement?
A: Numerous states have introduced and passed mandatory
disclosure laws to inform consumers that they have the legal right
to sell their policy and convert it into a Medicaid Qualified Long Term Care Benefit Plan that is
specifically used to pay for any form of Senior Care.
Q: Are there any restrictions to liquidate a life insurance
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
- Convert the policy into a Long Term Care Benefit Plan
- Assign the policy as collateral for a loan
- Borrow against the policy
Q: How does a life settlement compare to other funding options
A: A life settlement offers a lump sum payment based on the life
expectancy of the life insurance policy owner and the value of an
existing policy in exchange for transferring 100% of the death
benefit to the buyer which is taxed as income. There are no
restrictions on use of funds, no requirement for re-payment, and no
upfront fees. Click here to learn more.
About the Author
CEO of Life Care Funding, is an 18-year veteran of both the
insurance and long-term care industries. A nationally known
senior care advocate; he is the author of the Amazon best-seller
book "Help on the Way", a legislative expert, featured speaker,
columnist and contributor to a number of insurance and long term
care industry publications. Chris is a frequent guest about
senior issues on national radio programs; and has also been
featured in the Wall Street Journal, New York Times, USA Today,
Woman's World Magazine, Fox Business News, and PBS.
A former life insurance industry lobbyist with a background in
long-term care issues, he created the model to provide a funding
option for middle-class people who are not wealthy enough to pay
for long-term care, and not poor enough to qualify for
His blog on senior living issues can be found at www.lifecarefunding.com. He can be reached at