What is a
The Retained Benefit Life Settlement provides the flexibility of some cash now and some benefit later without paying any more premiums. A Funder buys the policy, makes a payment to the Policy Owner, pays premiums, and shares some of the net death benefit with the Policy Owner
Retained Benefit Life Settlement
The Funder buys the policy, makes an initial payment to the Policy Owner, maintains the policy, and shares some of the death benefit with the beneficiary
The Insured might live as long as 23 years.
American Life Settlements will always seek bids for traditional Life Settlements, a single lump-sum payment. The qualifications are identical: minimum age 60, maximum lifespan 23 years, and smallest policy $100,000. For Insureds who are now receiving licensed Long-Term Care or may need some within 90 days, quotes could be sought for Long-Term Care Life Settlements. There are no age limits and policies as small as $10,000 are accepted.
Retained Benefit Life Settlement
| Features | |
|---|---|
| Payout Structure | Some cash now, some benefit later |
| Minimum death benefit of policy | $100,000 |
| Minimum Age | 60 years |
| Longest Probable Lifespan | 23 Years |
| Tax status of sale | Initial payment possibly taxable |
How is the Retained Benefit Life Settlement unique?
The Retained Benefit Life Settlement provides some cash now and some benefit later, with the Funder paying premiums. The Policy Owner may request more or less cash now, with an offsetting change in the amount of benefit. Visualize a see-saw where one person goes up while the other one goes down.
Why is it more difficult to get a Retained Benefit Life Settlement than a traditional Life Settlement?
Funders prefer the simplicity of traditional Life Settlements. They buy the policy, make a single lump-sum payment to the Policy Owner, maintain the policy and collect all the death benefit. This is a Time Value of Money Industry and the math is simpler for Life Settlements.
Some Funders have decided not to offer Retained Benefit Life Settlements. American Life Settlements works with Funders who do.
What other Programs might be available for the Insured that qualifies for a Retained Benefit Life Settlement?
The health profile for traditional Life Settlements is identical to Retained Benefit Life Settlements: the minimum age is 60, maximum lifespan 23 years, and smallest policy $100,000. American Life Settlements always asks for Life Settlement bids for Insureds with this profile as there are fewer Funders who will transact Retained Benefit Life Settlements.
To qualify for the Long-Term Care Life Settlement, the Insured would have to be receiving licensed Long-Term Care or might need some within 90 days. These services could include but not be limited to In-Home Nursing/Health Care, Assisted Living, Alzheimer’s/Memory Care, Skilled Nursing Facility, and Hospice Care. Even if the LTC Account has been used up, there will always be a Final Expense Benefit. These transactions are Medicaid-compliant and tax-exempt.
What is the technical definition of a Retained Benefit Life Settlement?
A Retained Benefit Life Settlement is the sale of a life insurance policy to a third-party institutional investor for more than its cash surrender value, but less than its net death benefit. The Policy Owner transfers ownership of the policy in return for a single cash payment now. The buyer pays all future premiums. When the Insured dies, the buyer shares some of the net death benefit with the Policy Owner.
