What is a Life Settlement?
A life settlement is the sale of a life insurance
policy to an investor for a cash payout. The
settlement amount is more than the cash
worth of life insurance payouts are lost annually when policy owners 65+ years old lapse their policy.
of older Americans let unwanted policies lapse because they are unaware of the life settlement option.
of older policy owners would have pursued a life settlement if they had known about the possibility.
average higher payout than the top life settlement provider.
How It Works
Selling your life insurance policy involves a few simple steps. Once a policy owner determines that he or she is eligible for a settlement the payment from the sale can be available in just a few weeks. The first step is to use our simple calculator to determine whether a settlement is right for your situation, and once the decision is made to sell your policy a Magna representative, or your advisor, will walk you through the rest of the process.watch video
Who Is Eligible for a Life Settlement?
Most people who sell their life
insurance policies are over 65 years old
or have a significant health impairment.
Eligible life insurance policies are
Universal Life, Term and
Insurance policies with a death benefit of
$100,000 or more are typically better
candidates for life settlements.
Reasons to Sell Your Life Insurance Policy
You Want to Pay for a Senior Living Community
Even if they don’t need skilled nursing care, many seniors are drawn to the idea of a full-service senior living community, but studies show that the average cost of an independent living community is upwards of $3,000 a month.Watch Video
You No Longer Need Key Man Insurance
When a business is sold or the person on whom a “key man” policy was taken out retires or leaves for another company, such policies should be sold to get the most out of the company’s assets.Watch Video
You Can No Longer Afford the Premiums.
Increasing life insurance premiums can become burdensome. Some major insurers have boosted premium rates by as much as 200 percent. A life settlement can be a win-win in that situation, providing extra cash in the sale and removing a significant monthly expense from the policy owner.Watch Video
You Want to Supplement Your Retirement Income
Retirees hope to enjoy their golden years after years of employment. Travel, the arts, service and family enrichment are all opportunities seniors may want to embrace, and a life settlement could yield enough cash to help make a retirement dream a reality.Watch Video
You No Longer Need to Pay Estate Taxes
The decreasing likelihood of estate taxes means that seniors may not want to hold onto life insurance policies originally taken out for estate planning purposes. A provision in the 2018 Tax Cuts and Job Act doubling the estate tax exemption makes a safety net for estate taxes even less necessary.
You No Longer Need the Policy
If the circumstances surrounding the policy’s origination have changed, a life settlement could benefit the policy owner more than continuing to maintain the policy. The beneficiary’s needs might have shifted, or the money might be more needed in the present.
Your Term Policy is About to Expire
If a term policy is allowed to lapse, its owner might receive little or nothing in exchange for years of premiums. A term policy can be sold in a settlement, as long as it is converted to a whole or universal policy before the policy lapses or the conversion rider expires.
You Need to Pay for Long-Term Care
With medical bills and long-term care costing seniors more every year, life settlements are becoming a popular option. One study shows that long-term care, independent of medical bills, costs seniors anywhere from $18,000 to $97,000 a year.
Magna’s Life Settlement Process
Marvin from Texas
"The life settlement process with Magna Life was smooth and uncomplicated. Their professional staff supported me every step of the way. I’m impressed by your company and service I received.”
Get an estimate.
Use Magna's Life Settlement Calculator to see how much your policy may be worth.
Complete an online application.
Complete three easy application steps in MyMagna and, if you qualify, you could receive an offer in as little as 24 hours.
Find out if you qualify for a life settlement.
Our speedy underwriting process will quickly tell you if you're a candidate for a life settlement with Magna.
Receive an offer for your policy.
If you are a candidate for a life settlement with Magna, we will make an offer for your policy.
Receive and sign closing package.
Magna prepares a contract to verify coverage and change the ownership of your life insurance policy. Each state has different requirements.
Receive your cash payout.
Upon the change of ownership, Magna will provide you with a cash payout via direct deposit or check.
Magna’s Online Application
Our simple online application is fast and easy takes the friction out of applying for a life settlement. After the applicant completes three easy steps--complete your profile, authorize Magna to gather your health status and provide your policy information--Magna will evaluate the policy to determine whether the policy qualifies for a settlement.
This process is transparent, easy, mobile-friendly, and we're with you every step of the way either by phone call or live chat.
Life Settlement FAQ
Why should I consider a life settlement?
Many seniors are paying premiums on life insurance policies they no longer need or want while at the same time the expenses associated with retirement years are mounting. A life settlement provides a solution for both of those issues with one transaction.
How do I know if I qualify for a life settlement?
Start with Magna’s simple calculator to determine if a life settlement might be a good fit for you. If the results are favorable, a consultation with a Magna representative will direct you through the next steps to assess your specific situation.
How will Magna come up with a price for my policy?
Our experienced representatives consider the price of premiums, the structure and type of your policy and the health and medical history of the insured to come up with the best possible offer for your life insurance policy.
What types of insurance policies are best suited to life settlements?
Most policies sold in life settlements are universal policies, but term life insurance can often be converted to more permanent policies and sold for a cash windfall.
What types of medical information will the provider need to offer a life settlement?
As part of the life settlement process, a consumer completes a medical questionnaire and a health interview with a Magna representative, and he or she also gives Magna permission to access medical records for an accurate assessment of the individual’s life expectancy.
Are there situations where life settlements aren’t the best option?
Generally speaking, when a policy holder is more medically impaired than the original policy projected, a life settlement is an excellent option. There are some situations, particularly those in which an individual is healthier than anticipated or the policy wasn’t highly rated at the time it was issued, when a life settlement is not the best choice for an unwanted policy.
How long will the process take?
If you fill out our life settlement calculator today and schedule a meeting with a Magna representative, we will direct you to fill out the paperwork, we will gather the pertinent information and we should be ready with an offer in one to two weeks.
What will happen to my life insurance policy?
After the settlement transaction, the buyer pays all future premiums and receives the death benefit upon the death of the insured.
What if my insurance agent has discouraged me from pursuing a life settlement?
Any life insurance agent with a client’s best interests in mind should disclose the life settlement option, and more and more states are passing laws requiring such disclosure. Consumers have the right to comprehensive information about their financial and insurance options.