At Abacus Settlements, our goal is to become your trusted source for information about life settlements and to help you understand exactly what a life settlement is. We are committed to empowering senior consumers and their financial advisers with objective insight to help you make an informed decision regarding your life insurance policy.
In terms of definition, a life settlement (also referred to as a senior settlement) is a financial transaction where the owner of an unwanted life insurance policy transfers ownership and beneficiary rights to an institutional investment Fund. In exchange for transferring ownership, the insured receives a cash settlement that can often be four times greater than the cash surrender value. Life Settlements can also be in the form of paid up death benefit. Other factors include:
• The sale of life insurance policies are transacted in what is known as the secondary market for life insurance. Transactions are confidential and your privacy is protected.
• A majority of states (42 out of 50) now regulate life settlements. This provides seniors like you with the confidence that comes from knowing that government oversight is involved.
• Policies are purchased by institutional funding sources through an entity known as a “provider.” Abacus Settlements, a life settlement provider based in Orlando, facilitates the purchase of each policy by working with institutional investors comprised of hedge funds, insurance companies, banks, pension funds, and other major investment organizations. Abacus Settlements provides the policy owner with a lump sum cash payment, The Institutional investor takes over future premium payments, and receives the death benefit when the insured dies.
• Most types of policies can qualify for a life settlement, including universal life, whole life, variable, and term life..
• While policy holders 65 and over may qualify depending on medical factors and life expectancy, the most common age for most life settlement transactions is over 78 years old.
• In addition to the age and life expectancy of the insured, other factors that help determine the cash payment received in a life settlement include the amount of the death benefit, the future premium payments necessary to keep the policy in-force, compensation paid to brokerage services, the type of policy, and the rating of the insurance carrier.
In terms of consumer value, a life settlement offers seniors a sensible solution for a policy you may no longer need or can no longer afford. Rather than allowing a policy to lapse or surrendering it for a small cash surrender value, a life settlement offers you a practical alternative that makes economic sense. There are a variety of motivating factors for seniors who sell their policies, but some of the most common scenarios include the following:
• Financial assistance is needed to pay for medical bills
• Beneficiary has changed due to divorce or death
• Premiums are no longer affordable
• Funds are needed for long-term care
• A family business is sold or the owner retires and key person insurance is no longer needed
• Cash is needed to pay off debt
• Funds are needed for retirement or lifestyle enhancement
• Gifts to family members or charitable contributions
To pre-qualify your life insurance policy, we encourage you to use our confidential Online Qualification Tool. Or, if you prefer to speak with one of our representatives, simply call us at (800)561-4148.