Understanding Your Life Settlement Options
Understanding your options can help you make a more informed decision about a life insurance policy that may no longer fit your financial goals.
Life insurance policies are designed to provide protection and legacy for loved ones. Over time, circumstances may change, and policyholders may wish to explore options that better align with their current financial needs.
Exit Equity Concierge helps individuals and families understand the available paths so they can make informed decisions while honoring the legacy intentions behind their coverage.
Life Settlement
A life settlement allows a policyholder to sell their life insurance policy to a licensed institutional buyer in exchange for a lump-sum payment that is typically greater than the policy’s surrender value.
After the transaction is completed, the buyer assumes responsibility for future premium payments and receives the death benefit when the policy matures. Because the policy is sold in full, the original beneficiaries would no longer receive the death benefit.
Viatical Settlement
A viatical settlement may be available to individuals who have been diagnosed with a serious or life-limiting illness.
This option allows the policyholder to receive a lump-sum payment from their life insurance policy while still living. Depending on eligibility, viatical settlement proceeds may be tax-advantaged.
Partial Settlement
Some policyholders may have the option to sell a portion of their life insurance policy while preserving the remaining benefit for their beneficiaries.
This strategy, known as a partial life settlement, allows individuals to access liquidity from their policy while still maintaining a portion of the coverage for their loved ones.
Example Scenario:
Partial Settlement in Practice
For example, a policyholder with a $1,000,000 policy may choose to sell $500,000 of the death benefit, receive a lump-sum payment, and still maintain $500,000 in coverage for their beneficiaries.
This approach allows families to address financial needs in the present, while still preserving a meaningful legacy for those they love.
Explore Your Policy Options
Every life insurance policy and situation is unique. A confidential policy evaluation can help determine whether a life settlement, viatical settlement, or partial settlement may be available to you.