Giving While Living: Life Settlement Enables Senior Couple to Provide Cash Gift to Heirs Commission for the Agent

More wealthy seniors are discovering that gifting cash to heirs while they’re still alive can be very rewarding. Transferring your wealth now, rather than after you pass away, means you’ll be around to witness children and grandchildren enjoying the legacy you have left them.

This ‘giving while living’ mindset was documented in a 2018 survey of seniors 55+ conducted by Merrill Lynch. Two-thirds of the survey respondents said they prefer to distribute a large part of their estate while still alive.

An example of this giving while living mindset is detailed in the following case example involving a senior couple who used the proceeds from a life settlement to provide a cash gift to their heirs.

Selling $4 Million Policy Achieves Legacy Goal

The policyholder and his wife had decided it no longer made financial sense to pay the premiums for a $4 million policy that had become obsolete for estate planning purposes. Their insurance advisor recommended selling the policy for the highest possible value in the secondary market. The client agreed that a life settlement was a smart solution, considering the alternative was to simply let the policy lapse.

In addition to the fact that selling the policy made financial sense, the couple saw an opportunity to achieve an important estate planning goals. The pay-out from selling the policy would enable them to provide an immediate cash legacy to their adult children and thereby allow them to witness its impact during their lifetime.

The couple’s insurance advisor initiated the life settlement application process and Asset Life Settlements was asked to broker the case in the secondary market. Once we submitted the case to our network of funders and began the bidding process, we were pleased to see strong interest from 12 institutional buyers.

Following a rigorous negotiation process involving a total of 43 competitive offers, we presented the client with the highest offer of $910,000. The client and his entire family were thrilled with the outcome and grateful to their agent for recommending the solution.

Life Settlements Provide Added Value to Policy Owners

The life settlement market began evolving in the early 2,000s. Since that time, more than 3,000 life settlement transactions are completed every year.

According to a survey conducted by the Life Insurance Settlement Association, more than $790 million was paid to policy sellers in 2022. The average payout to the consumer was 5.2 times more than the cash surrender value of their life insurance policy.

There are numerous reasons why seniors choose to sell their life insurance policies. Some of the most common reasons include:

  1. The high cost of living has made it difficult to pay the annual premium.
  2. Some seniors need money to pay for medical or long term care expenses.
  3. Many seniors prefer to monetize the value of their unwanted life insurance policy in order to provide cash gifts to heirs or to enhance their retirement assets.

Our Fiduciary Commitment to Policy Sellers

The secondary market for life insurance provides a safe and effective solution for seniors who feel chained to life insurance policies they no longer want or need.

Once the decision is made to sell a policy, obtaining the highest possible offer from institutional buyers requires the services of an experienced life settlement broker, such as Asset Life Settlements. 

Asset Life Settlements has the credentials and secondary market expertise to negotiate the highest possible cash offer for a policy. More importantly, we have a fiduciary obligation to represent the policy seller’s best interests throughout the entire transaction.

Call us at 1-855-768-9085 to discuss your questions or to request a free policy appraisal.