Industry
of Interest
An Innovative Way to Improve
your Company's Bottomline
Amid falling corporate profits and a shaky economy, a new
way to improve your company's balance sheet has emerged -
Life Settlements. Without cost and job cutting, slashing employee benefits
or selling productive corporate assets, your company can achieve
significant bottom line improvement by utilizing Life Settlements. • What is a Life
Settlement?
A Life Settlement is the sale of an existing life
insurance policy for a lump sum of cash that is less than
the policy's face amount but more than the cash surrender
value. A life insurance policy is property, like a car, house,
stocks and bonds can be legally sold in accordance with applicable
laws. Through a Life Settlement, a policy owner can realize
value today from an asset that is generally thought to only
have a benefit when the insured passes away. Does your company own a life insurance policy that meets
the following criteria?
- Insures a person over age sixty-five (65)?
- Has a face value of at least $100,000?
- Is at least two (2) years old?
If so, then your company may be able to sell that policy
for lump sum of cash to spend or invest any way it wants. • How can Life
Settlements benefit your company?
Get a lump sum of cash and eliminate premium payment
expense for life insurance policies that your company no longer
needs or wants. Here are some examples:
- Executive retires or leaves the company
A key executive is retiring. The company owns a 5 million
dollar life insurance policy insuring his/her life that
it no longer needs. He/She does not wish to assume the policy
because he/she cannot afford the premium payments to keep
the policy in force.
Does the company have any options other than surrendering
the policy for cash value or just letting it lapse? Yes,
a Life Settlement.
- Buy/Sell arrangement obsolete
Partners in a small business have a buy/sell agreement
utilizing life insurance to fund the buy-out in case
of the death of a
partner. The partners retire and the business is sold during
their lifetimes to a third party and the policies are
no
longer needed.
Is there any alternative to surrendering the policies
for cash value or just letting them lapse? Yes,
a Life Settlement.
• How does a Life
Settlement work?
First, the life insurance policy should be appraised.
A Life Settlement Broker can determine the policy’s
eligibility for a Life Settlement and will seek to obtain
the highest possible offer for the policy. The value of a life insurance policy is determined by a number
of factors, including, but not limited to:
- The age and medical condition of the insured
- Type of insurance policy, rating of the issuing insurance
company
- Amount of premium payments to keep the policy in force
Most types of insurance policies can qualify, including universal,
whole life, and converted term. When a mutually agreed upon price is determined for the life
insurance policy, the company is paid a lump sum in cash.
The ownership and beneficiary rights are transferred to the
purchaser, all future premium payments are the responsibility
of the purchaser and upon the death of the insured, the death
benefit is payable to the purchaser. Your company can use the cash proceeds from the Life Settlement
in any way. There are no restrictions on use of the funds.
The money may be invested or spent. Increase your company’s bottom line by generating a
lump sum of cash and eliminating premium payment expense with
Life Settlements. ### The author
Jolene D. Fullerton, practicing attorney for eighteen (18)
years and former Director and Vice President of the Viatical
and Life Settlement Association of America, the industry's
trade association, is General Counsel for a leading Life Settlement
Broker company, First Secured Life, LLC.
Website: www.firstsecuredlife.com/non-profit.html ----------------------------------------------------------------------------------------------------
For more information contact:
Keith Campbell, Executive Director of Planned Giving
First Secured Life, LLC
1926 Victoria Avenue
Fort Myers, FL 33901
Toll-Free Telephone: 1-877-968-7785
Toll-Free Fax: 866-968-7785
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