Over the past year, a handful of state legislatures deliberated the merits of a variety of consumer-friendly initiatives involving life settlements.
More than a quarter of U.S. adults struggle to pay their medical bills, according to the Kaiser Family Foundation. In fact, medical debt is the No. 1 cause of personal bankruptcy filings – outpacing bankruptcies due to credit card bills or unpaid mortgages.
This case summary provides a powerful example of how a life settlement for a policy on the verge of lapsing can mean the difference between filing for bankruptcy and achieving financial stability.
When Mr. Green’s (not his real name) premium payments for his $750,000 life insurance policy escalated to more than $20,000 per year, he decided he could no longer afford the policy. With his life insurance about to lapse and mounting medical bills along with other debt, Mr. Green faced a serious financial crisis.
Having heard about life settlements from his social network, Mr. Green turned to the Internet to research his options and decided to call Trust Life Settlements.
During our initial conversation with Mr. Green, our team learned that at age 59, he was substantially younger than the normal qualifying age (65) for a life settlement.
In a typical life settlement transaction, the senior is 65 years or older with a limited life expectancy of 12 years or less. Providers (funders) who purchase life insurance policies prefer policies where the insured is in his/her late 70s. Some industry professionals estimate that the average age for a life settlement is approximately 78.
However, Green explained that he had a serious heart condition and based on the research he found on the Internet regarding heart disease and limited life expectancy, he was confident he might qualify.
Our team worked with Mr. Green to assemble his medical records and begin the underwriting process which involved a mortality analysis (life expectancy report) from a third-party actuarial firm. The results indicated that Mr. Green had a projected 8-year life expectancy, which fell within the purchasing guidelines of 12 years or less for most secondary market funders. Based on the life expectancy report, the likelihood of finding a secondary market funder to purchase the policy was high.
Trust Life Settlements teamed up with an experienced life settlement broker who shopped the case to 11 providers licensed in the state in which Mr. Green resided. Three of the 11 funders returned offers, and a total of 7 bids were received. The highest net offer was $400,000.
Mr. Green was stunned that a policy with zero cash surrender value (CSV) would qualify for a cash settlement equivalent to 53% of the policy’s death benefit. He expressed deep appreciation to Trust Life Settlements for the cash windfall which he planned to use to pay off debt and achieve financial stability.
If you are interested in learning whether you qualify for a life settlement, feel free to contact us at
1-800-216-2513, or visit our website at www.TrustLifeSettlements.com.