The Process


Deciding to Sell

Before making a decision, the policyholder and their beneficiaries must make the conscious decision to pursue this option. This means contacting your financial advisor or the Abacus team and looking into all alternatives to make sure that it is the most advantageous solution for you.

Determining Eligibility

There are certain specifics that determine if an individual will qualify such as premiums, the life expectancy of the insured, and the death benefit.The information disclosed will be used by an in-house medical underwriter who will calculate the insured's life expectancy and determine how much the policy is worth at no cost to the insured.

The Offer

Abacus, or the chosen buyer, would then extend an offer to the insured. The offer would be more than the price, but less than the net death benefit. The buyer must be licensed in the statein which the owner of policy resides.


If the amount offered by the licensed buyer is acceptable to the policy seller, they can choose to accept the offer and request the required documents for review.


At this time, the licensed buyer generates state-approved contracting documents. These documents are utilized to record the life settlement transaction as well as spell out the agreement between the seller and the purchaser. Both parties must sign and notarize the contracts.


Once the contracts are executed and all the required accompanying documents have been received, the verification process begins. Often completed by a third party like a law firm, this verification agent will check that all the contracting documents have been completed properly. They may also check that the policy is in full force and good standing with the insurance company. They will verify that the funds for the purchase have been put in an escrow account for the policy seller.

Change of Ownership

Subsequently, a request for ownership change will be sent to the insurance carrier. This ensures that the owner is changed from the current policyholder to the buyer or the financing entity that the buyer names as owner.

Funds Transfer

After the insurance carrier has confirmed that the purchaser is listed as the owner, the escrow agent is instructed to release the funds to the seller. The new owner is now responsible for all premiums going forward and the seller has received payment for the transaction.

This concludes the transaction and the insured is free to use the money at their discretion.

Should I Sell My Policy?

In 1911, the United States Supreme Court established life insurance policies were personal property. Since then, it has been established law that your life insurance policy is just like any other asset, and you have the choice to consider how best to use it for your financial future. Some of the most common reasons you may consider selling all or a portion of your policy include:


1. You Can No Longer Afford Premiums


Depending on the terms of your policy, changes in the insurance market and poor policy performance could drive up the price of the premiums you pay. Or you may have experienced an unexpected financial issue – like increased medical bills, legal issues, assisted living costs or tax issues – that’s now stretching your budget. Any number of factors often force people to stop paying their premiums and surrender a policy or simply let it lapse. In fact, the majority of all life insurance policies lapse, and all the funds invested through premiums are simply kept by the insurance company. The better option is often to sell all or part of your policy for a cash amount far higher than the surrender value.


2. Funds Are Needed To Pay For Medical Care Or Some Other Expense


Faced with financial changes or hardships, selling your policy to recoup the equity you’ve built over the years is a viable option to fund a large expense, such as funding assisted living or cancer treatments, paying medical bills or premiums on another existing policy.


3. You Want To Re-Invest The Equity You’ve Built To Take Advantage Of A Better Opportunity


You may want to recapture the dollars you’ve paid over the years into your life insurance policy and invest in a business, purchase a new home, pay off a debt or tax liability, purchase an income-generating annuity or take advantage of another opportunity where the equity built in your policy could better serve you.


4. Your Life Circumstances Have Changed


As we move through the various stages of life, many individuals find they simply no longer need a life insurance policy. Life changes, including divorce, retirement, the absence of an estate tax burden or your beneficiaries no longer needing the policy benefits are also reasons to consider selling a policy.


To learn more about if this is the right option for you, use our confidential Online Options Tool or call us at (800) 561-4148 to speak to a live representative.