Life Settlements Questions &
What is a Life Settlement?
A: A Life Settlement is a cash payment in exchange for an existing life insurance policy, with payment
in excess of the Cash Surrender Value. The purchaser pays all future premiums. Life Settlements are also referred
to as Viatical Life Settlements, Senior Life Settlements and Life Insurance Settlements.
For example, a Senior owns a $1,000,000 life insurance policy with a Cash Surrender Value (CSV) of
$125,000. The CSV is the amount the insurance carrier will pay on a surrendered policy.
If eligible, the policy can be sold in exchange for a higher amount (i.e. a Life Settlement) on the open market.
The open market is also referred to as the secondary life insurance market, where qualified funding institutions
purchase policies in exchange for the beneficiary assignment. On average, a Life Settlement will pay 2 to 5 times
more than the CSV.
To insure that a policy receives the highest bids possible, it is important that a Life Settlement application is
exposed to all institutional funders. A policy without a CSV can also qualify for a Life Settlement. Many factors
determine eligibility. See question, “Who
are candidates for a Life Settlement?”
What are reasons for choosing a Life Settlement?
A: Clients offer these reasons for choosing a Life Settlement...
Policy premiums are too high
The original need for the life insurance policy no
The beneficiary of the policy is deceased
The sale of the policy would allow the
policyholder to achieve an improved standard of living
The policyholder owns multiple policies and wishes
to eliminate one
The policyholder wishes to purchase a new life
insurance policy that is more suited to their current financial / insurance needs
The policyholder requires funds to pay for medical
A reduced estate value eliminates the need for a
life insurance policy originally purchased for tax liability reasons
Policyholder wishes to make a cash donation to
A "key man" policy that is no longer necessary.
(Used by companies to protect from the loss of key individuals)
A charity wishes to liquidate a life insurance
What is a secondary market?
A: A secondary market is where
a product is bought and sold after it is initially offered in the primary market. Stocks, bonds, mortgages, real
estate and life insurance policies are examples of products sold in secondary markets.
Q: What types of policies are considered for a Life
A: Almost every type of life insurance policy is considered for a Life Settlement. Among them
are Term, Universal Life, Whole Life, Survivorship, Key-man. Policies can be owned by individuals or entities, such
as trusts, corporations and charitable organizations.
How can the money from a Life Settlement be spent?
A: There are no restriction on how the proceeds from a Life Settlement are spent.
What is a Cash Surrender Value?
A: This is the amount of money that an insurance carrier will pay for a lapsed or canceled life
Who will pay the premium on my Life Insurance policy?
A: After the Life
Settlement is complete, the funder, who purchases your policy, pays all future premiums.
Are the proceeds from a Life Settlement taxable?
Though we highly recommend that you seek the assistance of a professional tax advisor, here is a general
description of how the proceeds of a Life Settlement are subject to taxation:
Policy Face Value:
The policyholder has a
$1,000,000 Life Insurance policy with a Cash Surrender Value of $125,000 and Total Premium Payments of $75,000.
The Life Settlement Amount is $400,000. In this example, the first $75,000 (from Premiums Paid) would be
nontaxable. The difference between the Premiums Paid and Cash Surrender Value would be treated as ordinary
income. The difference between the Cash Surrender Value and the Life Settlement Amount would be treated as a
Are my records kept confidential?
A: Yes, all records are stored in secure locations in accordance with state laws. The information and
documentation are only provided to qualified and licensed purchasing companies to solicit offers for you
How am I protected ?
A: Your financial interests are protected in numerous ways...
You incur no out of pocket costs. The
funding institution that purchases your policy pays all of the transaction fees.
A policy owner is not to obligated to
sell at any time.
AIM Life Settlements represents the
most qualified and professional companies in the Life Settlement industry. All are fully licensed and
adhere to the highest standards of business integrity.
A third party escrow company is used
for fund transfer.
Even after the settlement proceeds
have been disbursed, your complete satisfaction is assured, as all transactions have a rescission
period (generally 15 days), which has been determined by your state.
Q: How much will I receive for my
A: There are a number factors that determine the amount of a Life Settlement: Age, Premiums,
Policyholder's health, Type of policy, Insurance company rating, Policy size, Competitive bidding. The average
settlement amount is 2 to 5 the cash surrender value of the policy.
An exact amount cannot be determined until you have gone through the application process. This is a relatively
simple process and is free of charge.
Who are candidates for a Life Settlement?
A: Here are some general guidelines that indicate if an individual is a potential candidate for a
Males over age 65
Females over age 70
Individuals with a life expectancy of 12 years or
Anyone suffering from a terminal illness
Minimum of $100,000 in life insurance coverage
Other circumstances may
qualify. Call for a free, no-obligation pre-screening. 1-888-441-8881
What are the steps in the application process?
A: Our Life Settlement process
is a snap. One application from you sets the wheels in motion for a process that will see your policy reviewed by
every Intuitional Life Settlement Funders . Only one company will contact your doctors and insurance
company. All records are kept in the strictest confidence.
Here are the basic steps of
the Life Settlement process...
There are no out of pocket costs paid by the
seller. The purchaser of the policy pays all of the transaction fees.
You submit an application and supporting
Medical and insurance records are obtained by our
The underwriting team conducts a review to
Negotiations are conducted with multiple funding
sources to ensure the absolute highest offer.
Upon acceptance of a settlement amount by the
policyholder, a purchase and sale contract is completed.
An third-party escrow account is established.
Policy ownership and beneficiary rights are
transferred and funds are release to policy owner.
Standard processing time (application to fund
transfer) takes between 7 and 10 weeks. A shorter processing time is possible.
After the transaction is complete, the
Policyholder still has approximately 15 days to rescind the deal (regulated by state).
Why should I work with AIM Life Settlements
A: AIM Life Settlements is designed to deliver the absolute
highest cash profit offer for your Life Insurance policy.Our brokerage company presents and negotiates Life
Settlement cases with every qualified and institutional Life Settlement Funder. In doing so, we create an
"open market" for your Life Insurance Policy. The more funding sources that bid on your policy, the greater the
demand and the higher the settlement amount. The result is more interest in your policy...and a higher cash
value to you.
AIM Life Settlements represents the most qualified and professional companies in the Life Settlement industry. All
are fully licensed and adhere to the highest standards of business integrity.
We strive to deliver maximum value and superior service to our Policyholder and Financial Advisor clients. A policy
owner is not obligated to sell at any time, and you will never be pressured. After all, a Life Settlement is
a very important decision. Even after the settlement proceeds have been disbursed, your complete satisfaction is
assured, as all transactions have a rescission period (generally 15 days), which has been determined by your