Insured and Policy Sellers

What is a Life Settlement?

A life settlement is the sale of a life insurance policy to a third party for a lump-sum, cash payment of less than the face amount but for more than the cash surrender value offered by a life insurance company.

Life settlements represent an important solution for a growing number of people who thought they were stuck with a life insurance policy they no longer need. Many people don’t realize a life insurance policy is their personal property that can be sold.

life settelements process - Insured and Policy Sellers

Picture this: If you purchased a house and there was a clause in your contract where the builder said: “You may only sell the house back to me and nobody else.” You could walk away from the house and receive nothing for it, or you could sell it to the builder, who would likely not be willing to offer you fair value for the ouse.

Wouldn’t you rather have had a free market and have people offer you what the house is really worth?

In the life settlement industry, that’s exactly what we now have for life insurance. Rather than walk away from the policy or take a below-market bid from a life insurance company, policy owners now receive fair value for the policy through an auction process.

time with family not insurance premiums - Insured and Policy Sellers

Discover How Life Settlements Can Change Your Life

Why continue to pay costly premiums on a policy that no longer serves its original purpose? Here are some of the reasons a policy would no longer be needed:

  • Found another life insurance policy with superior coverage
  • Dependents no longer need financial assistance
  • Spouse or intended beneficiary is deceased
  • Key man left company
  • Term policy is about to expire

Life settlements are a valuable financial planning tool that you deserve to benefit from. Complete our questionnaire or contact a Magna representative to see if your policy qualifies for life settlements. Be sure to check out our Life Settlement Calculator today!

Alternative Investments with Magna Life Settlements How much is my life life insurance policy worth? Life Insurance Brokers at Magna Cash Value Life Insurance Life Settlement Investing with Magna and Vida Capital Viatical Investments with Magna

Frequently Asked Questions

What are life settlements?

A life settlement is the selling of one’s insurance policy for a cash payment of less than the face amount but for more than the cash surrender value.

Why would someone want to sell their policy?

Reasons for selling a policy include (but are not limited to): Paying off debt, supplementing retirement income, changes to estate planning, getting rid of expensive premium payments, selling policy and using money from sale to obtain a policy with superior coverage. Due to changes in family circumstances, a life insurance policy owner may no longer need the insurance provided by the policy. A spouse may have died, children may have grown up, or a company with life insurance on a key officer may have been sold or gone out of business.

Are life settlements for me?

Possibly. Talk to one of our life settlement experts or consult your insurance agent to see if this is a real solution for you.

What is the life settlement process like?

Visit our process page.

What are the costs associated with a life settlement?

Magna takes no fee from you for selling the policy.

If you are retaining a life settlement broker, a fee, commission, or other form of compensation is often paid to your broker for: life settlement consultation, the cost of obtaining medical records and life expectancy reports. That fee is negotiated between you and your advisers.

How much is my policy worth?

The main factors for determining the value of a life insurance policy are the age and medical condition of an insured. Take our PYC questionnaire or contact us to find out if a life settlement is right for you. Be sure to checkout our Life Settlement Calculator to see the value of your Life Insurance Policy.

What happens to my policy after it’s sold?

You are no longer responsible for premium payments and no longer own the policy.  You may be asked to update information regarding your health periodically.

Will my personal and medical information be protected?

Yes. Magna takes your confidentiality very seriously and all records are kept in accordance with state and federal privacy laws.

Are the proceeds of a life settlement taxable?

Life settlement proceeds may be taxable. You should consult your tax advisor for additional information.

Are life settlements legal?

Yes, the Supreme Court of the United States declared that your life insurance is personal property that can be sold, traded or even given away. Your life insurance carrier has no right to question or prevent you from doing this.

Am I obligated to sell my policy?

No. You are under no obligation to accept an offer.  In fact, there is a 15 day rescission period that allows you to change your mind and not sell for up to 15 days after receiving payment for the policy in most states. The rescission period varies from state to state.

Can I keep a portion of the death benefit but not pay the insurance premiums?

Yes, that is known as a retained death benefit (RDB). Read our brochure and FAQ sheet.

Are life settlements the same as viatical settlements? What is the difference?

A viatical settlement involves an insured with a life expectancy of less than 24 months or as defined by the Department of Insurance for the applicable ownership state.  If the insured has a life expectancy of more than 24 months or doesn’t meet the qualifications defined by the Department of Insurance, the transaction is considered a life settlement.

See How Much Your Policy May Be Worth