Sale of a term life insurance policy

A life insurance agent recently conducted a yearly review of his client’s life insurance policy.  Noting that the policy was soon to run out of conversion privilege, he decided to explore options on this policy.  After realizing the estate had shrunk and the need for insurance was less than previously calculated, the agent recommended a Life Settlement for the client.

After waiting for the 8 week underwriting process to complete, he was happy to learn that SBA had found an institutional life settlement provider who would allow him to convert the policy as the writing agent and sell the new universal life policy for a percentage of the death benefit.  Without the annual review, the agent never would have found the opportunity that the client needed to fund a long term care product that he desired.

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Life Settlement licensing requirements vary by state. In some states, life agents and other financial professionals must be licensed to source policies or receive commissions. Settlement Benefits Association is not licensed in all states. Some or all of the proceeds of a Life Settlement may be taxable under federal or state income tax laws. Advice from a professional tax advisor is recommended. This web site is not currently approved in the states of Oklahoma or Texas. This web site does not apply to variable life settlements. Receipt of proceeds may impact eligibility for government benefits and entitlements. Prior to sale, the insured should consider the continued need for coverage, impact to estate plans, availability of insurance, cost of comparable coverage or tax implications.