What Is An Inforce Illustration?
An inforce illustration projects the current costs of your life insurance policy from lapsing.
Every year more seniors realize the benefit of exploring a life settlement to get an immediate benefit from an unneeded life insurance policy. As settlements become a more popular option, consumers are realizing that they can investigate and enter into life settlements themselves if they choose, without going through an advocate.
To go through that process, they must first understand the steps of a life settlement and define the terms of the industry. One of the most important steps is obtaining an in-force illustration.
An inforce illustration might sound like a concept only understood by insurance professionals, but in fact it is quite straightforward and a critical step in the life settlement process. After a person over the age of 65 does preliminary research into a life settlement using Magna’s simple calculator or through a phone call with a Magna life settlement advisor, the next step is to obtain an in-force illustration from the insurance provider and submit it to Magna.
How to obtain an inforce illustration?
Magna can help you gather an inforce illustration from your life insurance carrier. First, schedule a time for a Magna Case Administrator to call you. Together, we will contact your life insurance carrier to request an in-force illustration.
How to request an inforce illustration
Or you may call your insurance carrier by yourself. On the call with the insurance carrier, please request the following type of in force illustration:
“Solve for minimum level premium to maintain the death benefit through maturity, solving for $1,000 of account value at maturity.”
What you must know about inforce illustration
Projects the future costs of premiums
It projects the future costs of premiums through maturity of the policy, allowing a policyholder to accurately compare the costs and benefits of keeping a policy versus selling it in a settlement.
Comes from the life insurance carrier at the request of the life settlement provider
The inforce illustration finds the minimum premium liability until the policy matures (typically at age 100) and the net value of the policy is $1,000. Because the illustration uses current interest rates, it often produces results very different from the projections at the time when the policy originated.
It is a valuable tool for both consumers and settlement providers
Our Magna life settlement provider will schedule a call with a client, and together they will call the insurance company to request the inforce illustration. The results will inform both the client and Magna’s representatives about the suitability of a life settlement, and if the client decides to move forward the next step is a comprehensive review of the policy and an informal offer from Magna.
Inforce illustrations are valuable for anyone with a life insurance policy
They keep consumers informed and eliminate unwelcome surprises if interest rates and premiums go up. But for those considered a life settlement, these illustrations are a critical step that illuminates the costs and benefits of holding onto a policy versus selling it for a cash windfall. Schedule a call with Magna’s life settlement expert today to learn more.