Life Insurance Settlements
Eligibility and Determining a Life Settlement Amount
Assessing your eligibility and calculating how much money you could receive
for a Life Insurance Settlement is not an exact science. However, the following
guidelines should help you understand the process.
Generally, when the insured is 65 years or older they may qualify for a life
settlement, or a lump sum payout. This allows the insured and his or her
beneficiary to get immediate cash rather than wait for the death of the insured.
The size of the cash payout depends on the age and the health of the insured.
In addition to age, health condition and the premium structure are factors that will
determine whether someone qualifies for a life settlement. The following is a
limited summary of the placement parameters:
- Company Rating - B+ or higher
- Face Value Maximum - Unlimited
- Face Value Minimum - 100K
- Premium Ratio - Less Than 7%
- Life Expectancy - Up to 15 years
Age and Health
Only a Life Settlement broker will be able to assess your candidacy accurately,
but here are some more specific parameters that may qualify you as a good candidate
for a Life Settlement:
- Male 70+ in good health
- Female 75+ in good health
- Male 65+ with some health problems
- Female 68+ with some health problems
If you have a terminal illness or very serious health problems, a Life Settlement
may not be the right option for you. Speak with the life settlement broker to help you
assess the right option for you.
Types of Policy
Most types of Life Insurance policies are eligible for a Life Settlement and should
typically have been active for at least two years.
- Convertible Term Life and Universal Life are usually the most eligible to convert
- Variable Life and Whole Life are still options for settlements but there may be less interest