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John owns a $500,000 universal life insurance policy with a cash value of $32,000 and has been paying the same premiums for 10 years. Recently, he has noticed that the cash value in his policy has been going down. Although John has tried to replace his coverage with a more efficient policy, he couldn't find an insurer that would offer him life insurance on any better terms.
Before Senior Settlements, his options were: lapse the policy, increase his premium payments to stabilize the policy, or withdraw the cash value and surrender the policy. John doesn't like any of these options because he wants to ease the estate tax burden on his children.
John got a Senior Settlement. Rather than drop the policy, John sold it for an amount equal to 20% of the face value of the policy and received $100,000. He used a portion of his settlement to purchase a joint and survivorship life insurance policy that was better suited to meet his estate planning goals. And he reduced his premium expenses.
He placed the remainder of his settlement (approx. $70,000) into an annuity that gave him extra monthly income.
John feels he got the best of all possible worlds: A better policy for his family, at less cost, and an increase in monthly income!
This is just one example of a client whose unique financial circumstances were best solved by utilizing a Senior Settlement.
