[Press Release] Trademark Awarded for American Life Settlements

/in , , /by Morris Heins

Press Release: American Life Settlements Awarded Registered Trademark after 20 Years in Business

Link: http://www.prweb.com/releases/american_life_settlements_awarded_registered_trademark_after_20_years_in_business

We are proud to announce that our Life Settlement Brokerage, American Life Settlements®, received its Registered Trademark on December 10, 2019. July 10, 2000, was confirmed as our service mark’s first use in commerce, making us among the oldest Life Settlement Brokerages. The U.S. Patent and Trademark Office categorized our company as providing “Financial services, namely, insurance policy brokerage, settlement, and loan services.” Many exclusive and enforceable rights were conferred to us as a result.

American Life Settlements: What we do.

American Life Settlements is a family-owned Life Settlement Brokerage based in Carmel, Indiana. During our 20 years in business, we have helped people from ages 32 to 93 with lifespans up to 23 more years or less than 5 sell their life policies. Life Settlement Brokers owe a fiduciary duty to policy owners. This requires orchestrating competition among a great many Life and Viatical Settlement Providers, including TV advertisers. Each Provider utilizes doctors, actuaries, and life insurance underwriters. Larger cases may require Providers to buy Lifespan Estimate Reports. All these efforts require comprehensive medical records of active conditions that may impact longevity. This process ultimately reveals each policy’s true market value, which is not possible with a calculator or quick quote by phone without any hard facts. American Life Settlements®, with decades in the business and a nationwide network of buyers, is unequaled in both industry expertise and dedicated customer care. The event of our Registered Trademark validates our many years of hard work delivering great results for our clients.

Current Business Climate: Continued growth is forecast.

Here are the facts: The population of potential applicants increases by the day. The number of people in America age 65 or above is estimated to grow from 52 million (2018) to 82 million by 2040 and 98 million by 2060.

Average Life Settlement payouts range from 4 to 8 times the cash surrender value. Most people do not know that Convertible Term policies are the easiest to sell for top dollar. Yet only $3.8 billion of Life Settlements were transacted in 2018 while some $200 billion of life insurance was terminated without quotes.

Why are seniors leaving a fortune on the table? The primary reason is that there are not enough licensed professionals advising clients about Life Settlements.

Our Company’s Difference: American Life Settlements helps licensed professionals to transact Life Settlements.

Licensed professionals may add Life Settlements to their practice in a compliant and appropriate manner. These include, but are not limited to, life insurance agents, securities representatives, investment advisers, financial and estate planners, accountants of every variety, and attorneys. Those who cannot accept Life Settlement compensation may have it added to client payouts. Being able to advise about Life Settlements is of particular importance to those who already owe a fiduciary duty to their clients.

American Life Settlements does not sell products or financial advice. Clients are free to use or invest their money as they choose. Thus, we do not compete with Advisors who associate with us.

Company History: Making the transition from selling life insurance to brokering Life Settlements.

Our life insurance agency of 1987 began transacting Life Settlements in 1998. One of our first clients was our President and Founder’s close friend of many years, a retired Marine Colonel from the Korean Conflict who started up a business after retiring from his corporate VP position. His Life Settlement of our Convertible Term policy saved his home from foreclosure and enabled him to rebuild his savings. Bringing cash to the living was far more rewarding than delivering death claims. With encouragement from him, his wife, and other happy clients, Morris Heins founded American Life Settlements before launching his first Website in 2000.

More Information:
Website: https://americanlifesettlements.com
Licensed Professionals: https://americanlifesettlements.com/company/
LinkedIn: https://www.linkedin.com/in/morris-heins/
Phone: 888-247-3659

[News] H.R. 5958 Bipartisan Senior Health Planning Account Act

/in , , /by Morris Heins

H.R.5958: Bipartisan Senior Health Planning Account Act

What would the passing of H.R. 5958 mean for Life Settlements?

This Act would, if passed into Law, allow Life Settlement funds to be put into a tax-free Account and used for healthcare expenses. It would encourage the sale of policies before they lapse which 9 out of 10 policies do today.

How can I get involved?

Getting involved is easy. Contact the representatives: Sponsor Rep. Bryan D. Higgins (D-NY-26) and Co-Sponsor Rep W. Gregory Steube (R -FL-17) are listed in the Resources section below should you want to contact either or both. Their sites allow easy tracking of the Act as it makes its way through the law-making process.

How does this change Life Settlements from the current state of affairs in 2020?

As it stands today, the only policy sale that is tax-free is the Viatical Settlement which requires medical certification of probable death within 24 or fewer months. A feature of some life insurance policies is the Accelerated Death Benefit, which is also tax-free but requires a lifespan estimate of 6 or 12 months depending on the carrier. This is a loan from the carrier collateralized by the death benefit, and premiums are still payable. These terminally ill options were created by the passage of HIPAA, the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191.

Note: There is an “Exception for business-related policies” that may nullify the tax-exemption for such policies.

Resources/Appendix

[Update] Major tax reductions for Life Settlements

/in , /by Morris Heins

[Update] Major tax reductions for Life Settlements

There may be Federal taxation when a cash value policy is surrendered for cash but not sold.

In 2009 the IRS issued Revenue Ruling 2009-13 which explained the taxation of cash value policies that were terminated and surrendered for cash. An example follows, and links to this Revenue Ruling is in the Addendum.

Example: Individual A

Individual A, the Insured/Owner, terminated a cash value policy and surrendered it for the $78,000 surrender value. $64,000 of premiums had been paid. The resultant gain of $16,000 was taxed as ordinary income. This calculation has not changed.

Federal taxation of life insurance policy sales has been improved.

IRS Revenue Ruling 2020-05 (February 12, 2020) provided this example wherein Individual A sold his policy for $80,000. The $78,000 of surrender value and $64,000 of premium payments were the same as when the policy was terminated and surrendered.

Taxable income per Revenue Ruling 2009-13 published May 1, 2009:

  • $26,000 was taxable as ordinary income.

Per Revenue Ruling 2020-05:

  • $14,000 was taxable as ordinary income.
  • $ 2,000 was taxable as long-term capital gains.

The link for Revenue Ruling 2020-05 is in the Addendum.

Example: Individual B

Individual B sold a 15-year level term policy for $20,000. $45,000 of premiums had been paid.

Taxable income per Revenue Ruling 2009-13 published May 1, 2009:

  • $19,750 was taxable as ordinary income.

Taxable income per Revenue Ruling 2020-05 published February 12, 2020:

  • Zero taxable income. All $20,000 of premiums were counted as the basis.

Federal tax refunds are subject to the statute of limitations.

  1. The effective date of Revenue Ruling 2020-05 is retroactive for all sale transactions on or after August 26, 2009.
  2. Tax refunds are subject to the statute of limitations, often two or three years, but
    require a tax professional before filing.

ADDENDUM

(A) Cash value policy surrenders and all life insurance policy sales may also be subject to taxation in certain states. The focus of this narrative is taxation by the Internal Revenue Service, part of the U. S. Department of the Treasury.

(B) The Insureds in each IRS example were not terminally or chronically ill.

(C) American Life Settlements ® discusses two-exempt options for life insurance policies that were created by HIPAA, formally known as Public Law 101-191, Health Insurance Portability and Accountability Act of 1996.

  1. Viatical Settlements are tax-exempt policy sales.Click here for more information about Viatical Settlements.The Viatical Settlement is the first of our two tax-exempt sections. To qualify, the Insured must obtain a physician’s certification of probable death within 24 months. A Viatical Settlement Provider buys the policy, makes a lump-sum payment to the Policy Owner, pays premiums, and collects the death benefit. There are certain exceptions for business-related policies.
  2. The Accelerated Death Benefits is a tax-exempt feature of some life insurance policies.
    Click here for more information about the Accelerated Death Benefit.

The Accelerated Death Benefit is our second tax-exempt section. It is a carrier-sponsored feature in many, but not all, individual and group life insurance policies for terminally ill Insureds with a life expectancy ranging from 6 to 12 months, depending on the policy. The Policy Owner receives a tax-exempt loan from the carrier, continues paying premiums sufficient to keep the policy in force, and collects the net death benefit after the carrier deducts loan principal, interest, and fees. There are certain exceptions for business-related policies. American Life Settlements® is not involved as a Broker when an Insured might qualify for an Accelerated Death Benefit. We explain this without compensation as part of our fiduciary duty.

Since 1998 almost all recipients of an Accelerated Death Benefit have kept the balance and not sold what was left. One 32-year-old male Servicemember received a $75,000 Accelerated Death Benefit from his $500,000 policy and we brokered the rest for $243,000.

References

HIPAA, full text:

IRS text:

Title 26 – Internal Revenue Code, 101. Certain death benefits

  • Pages 425-432
  • Link: <a href=”https://www.govinfo.gov/content/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleA-chap1-subchapB-partIII-sec101.pdfhttps://www.govinfo.gov/content/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleA-chap1-subchapB-partIII-sec101.pdf</li>

Internal Revenue Ruling 2009-13, May 1, 2009

Internal Revenue Bulletin: 2009-21, May 26, 2009

Internal Revenue Bulletin: 2020-05

IRS Refund Information Guidelines for the Tax Preparation Community

A non-profit resource for tax information: The Tax Foundation.

“The Tax Foundation is the nation’s leading independent tax policy nonprofit. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity.”

[Announcement] Registered Trademark for American Life Settlements

/in , /by Morris Heins

Announcement: American Life Settlements® Registered Trademark

We are proud to announce that our Life Settlement Brokerage was awarded Registered Trademark #5930168 on December 10, 2019.

The U.S. Patent and Trademark Office determined that our offerings were sufficiently unique to be categorized as “Financial services, namely, insurance policy brokerage, settlement and loan services.” July 10, 2000, was our service mark’s first use and its first use in commerce.Many exclusive and enforceable rights were conferred to our independent, family-owned business as a result of this Registered Trademark.

Why we moved from selling new life insurance to brokering the sale of old ones.

Our life insurance agency of 1987 added Life Settlements to its menu of services in 1998 after senior insurance clients and referrals asked us to sell one or more of their policies. One of these Insureds was a close friend of many years before business and health problems bankrupted him and his wife. His Life Settlement proceeds prevented their home’s imminent foreclosure and helped rebuild their savings. As a retired Marine Colonel from the Korean Conflict, he celebrated this event by taking me the Marine Corps Birthday Party at the Roudebush VA Medical Center. This was a life-changing emotional experience for me. I returned home with the realization that delivering needed cash to the living was more important and motivational to me than writing up new life policies and delivering death claims.

American Life Settlements was founded, and our first Website was launched with the encouragement of the Colonel and his wife. We phased out the sale of insurance products to focus exclusively on Life and Viatical Settlements. Since then we have helped people from 32 to 93 with lifespans of more than twenty-three years to less than five. Our site features six programs including the Retained Benefit Life Settlement for those who want some cash now and to leave some benefit later. We also assist a variety of licensed professionals in adding Life Settlements to their practice.

Continued growth is forecast.

The Life Settlement Industry looks ahead to solid growth thanks to increasing numbers of people age 65 and older and greater interest by investors in this asset class because it is not correlated with financial markets, commodities, or politics. We are bullish on the Life Settlement Industry’s continued ability to broker policies for much more than cash surrender values, as well as Convertible Term policies.

We love questions.

You can tell whether a person is smart by their answers.
You can tell whether a person is wise by their questions.

888.247.3659

Click here for additional information about our company

Morris Heins, President and Founder

[Part 3] How to overcome 20 Life Settlement Hurdles: The Insurance Company

/in , , /by Morris Heins

In part 3 of the series, we describe how life insurance companies (carriers) may contribute to the difficulties in getting a timely Life Settlement.

Issue #18: Most carriers delay creating life insurance premium illustrations.

Life Settlements could be 30% faster if carriers would just do their jobs promptly.To issue binding Life Settlement quotes, Life Settlement Providers must know the level annual cost of premiums to age 100. Carriers know that such an illustration is an essential part of a Life Settlement transaction. An illustration can be done in 20 minutes, but carriers usually take three or more weeks. Life Settlement Brokers secure these illustrations with cooperative carriers. When carriers are obstructive, Policy Owners must get involved.

Issue #19: Some carriers insist on working only with the Policy Owner

Read more

[Part 2] How to Overcome 20 Life Settlement hurdles: The Insured

/in , /by Morris Heins

How to Overcome 20 Life Settlement hurdles

Part 2 is focused on personal issues involving the Insured and/or the Policy Owner that are common hurdles that must be overcome when getting a life settlement. Of these, the most important is the health of the Insured. Other topics include legal proceedings such as bankruptcy, divorce, and incompetence.

#Issue 13: The Insured’s health has not changed since policy issuance

The most important personal Life Settlement question is: Would the Insured probably get the same health rating on a new life insurance policy? Life Settlement Providers typically prefer cases where the Insured’s rating would be worse or even uninsurable. Health that is essentially the same as when the policy was issued makes a Life Settlement far more difficult, though Convertible Term policies sometimes make the difference.

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[Part 1] How to overcome 20 Life Settlement Hurdles: Policy Issues

/in , , , , , /by Morris Heins

In this three-part series, we identify conditions that may impact your Life Settlement.

Part 1: In part 1 we cover 12 issues with the life insurance policy itself. These issues include the Term Conversion deadline, Grace Period, Lapsation, and types of life insurance.

Part Two: Discusses 5 typical issues involving the Insured and/or the Policy Owner

Part Three: Reviews 3 common concerns with the carrier (life insurance company).

Issue #1: The Term Conversion deadline

Life Settlement Providers prefer buying Convertible Term life insurance policies more than all other types of life insurance combined. Providers need to submit conversion paperwork before the policy’s contractual deadline.

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Illustrations: This Unknown Roadblock Slows Down 90% of Life Settlements

/in , /by Morris Heins

The primary delay in getting Life Settlement quotes is obtaining an illustration for the cost of premiums from the carrier (life insurance company). This particular hurdle can stop a sale in its tracks if you have a Convertible Term or Universal Life insurance policy.

Question 1: What are “illustrations”, and why is this a required step?

Life Settlement Providers (Funders, Buyers) must know each policy’s minimum annual cost of level premiums to the Insured’s age of 100.  An “illustration”, along with the Insured’s lifespan estimates, help Providers decide which policies to buy and which to decline. Illustrations are created by the policy owner’s life insurance company (“Insurance Carrier”).

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[Checklist] The Top 11 Questions You Must Answer Before Getting A Life Settlement

/0 Comments/in /by Morris Heins

There are many hidden roadblocks that can slow down a Life Settlement, or even make it impossible. Insurance policy owners often do not know they have a problem – until it is too late.

We have compiled 11 of the most critical questions we ask our clients. These questions can uncover the many hurdles that slow down, defer or even stop a Life Settlement if not resolved quickly.

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