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Senior Life Insurance Settlement

Case Studies

These senior life insurance settlement case studies are designed to illustrate some typical life settlement scenarios. They demonstrate some of the reasons and common circumstances involved in a senior insurance settlement. Whether someone participates in a senior life insurance settlement to reduce expenses, eliminate debt, fund retirement or estate planning purposes, the opportunity to sell one's life insurance policy can significantly impact a senior's life. These case studies are based on actual senior insurance settlements research as reported by the Life Insurance Settlement Association (LISA)**.

Senior Life Insurance Settlement Case Study #1
Replacing Multiple Insurance Policies with a Senior Insurance Settlement to Realize Big Savings:

An 80 year old, retired businessman held multiple life insurance policies with a cumulative $5 million death benefit, costing $426,113 in annual premiums. The annual premiums were higher than those of other life insurance policies offering the same death benefit. With a senior life insurance settlement he was able to sell his existing policies for $950,000 and fund a new single $5 million policy. As a result he maintained his life insurance coverage but reduced his total annual life insurance premiums to just over $300,000. Therefore a senior life insurance settlement allowed him to save $125,312 in premiums each year.

Senior Life Insurance Settlement Case Study #2
Preventing financial ruin with a Senior Insurance Settlement:

A 78 year old male had financial difficulties and was unable to continue paying the premiums for his $250,000 policy. He was at risk of foreclosure on his home and had mounting bills. Unexpected health issues not covered by Medicare contributed to increasing debt. After lending money to a family member he found himself in dire straits financially. His life insurance premiums were increasing and he was preparing to let the policy lapse. A friend suggested senior life insurance settlements as an alternative to surrendering the policy for nothing. After consulting a financial advisor he sold the policy for $70,000 in a senior life settlement. As a result of the senior life insurance settlement he was able to keep his home and pay off his bills.

Senior Life Insurance Settlement Case Study #3
Creating Financial Security & Peace of Mind with a Senior Insurance Settlement:

A 76 male owned a $2.5 million Universal Life Survivorship policy with $55,544 in cash value. His wife and co insured had already died. The premiums were too expensive for the man to continue paying and he considered surrendering the policy to the insurance company for the $55,544 in cash value. A senior life settlement was suggested by his insurance broker and he was subsequently referred to a senior life insurance settlement specialist. The man ultimately sold the policy for $785,000 in his senior life settlement and said the transaction had changed his life.

Senior Life Insurance Settlement Case Study #4
Funding Less Expensive Replacement Life Insurance Coverage with Senior Insurance Settlement:

An 83 year old woman was paying $42,321 annually for a $1 million Universal Life policy that she owned. She needed to reduce her expenses in order to maintain the quality of life in her golden years. She identified her life insurance premiums as an area that she could cut costs, but wanted to remain insured. She sold her existing policy in a senior life settlement for $310,000. Then she used the senior life insurance settlement proceeds to purchase a new $1 million policy with much lower premiums.

Senior Life Insurance Settlement Case Study #5
Enabling a Comfortable Retirement with $1.1 Million Senior Insurance Settlement:

A 73 year old business owner was unsuccessful in selling his business for an amount that he deemed sufficient to fund his retirement needs. As is common with many businesses, his business owned a $5 million key man policy on him. He and his financial adviser recognized the policy was unnecessary if he was selling the business and decided to sell the policy in a senior insurance settlement. As a convertible term policy it had no cash value, but was sold in a senior life insurance settlement for $1.1 million. Thus the senior insurance settlement allowed him to comfortably fund retirement prior to selling his business.

**Please contact the Life Insurance Settlement Association for a copy of the case studies at (407) 894-3797.