{"id":16533,"date":"2019-08-28T07:00:03","date_gmt":"2019-08-28T11:00:03","guid":{"rendered":"https:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/when-a-straight-life-settlement-sale-doesnt-make-sense\/"},"modified":"2019-08-28T07:00:03","modified_gmt":"2019-08-28T11:00:03","slug":"when-a-straight-life-settlement-sale-doesnt-make-sense","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/08\/28\/when-a-straight-life-settlement-sale-doesnt-make-sense\/","title":{"rendered":"When a straight life-settlement sale doesn\u2019t make sense"},"content":{"rendered":"\n
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Life insurance settlements can offer a compelling solution for policyholders who need quick access to cash. But in certain instances, a straight cash offer isn\u2019t the best way to address the need for liquidity \u2014 in which case, a little creativity is needed.<\/p>\n

Lisa Rehburg, president of US-based Rehburg Life Insurance Settlements, recently drove home that point in a piece published by ThinkAdvisor.<\/p>\n

Rehburg shared the story of a couple and their financial struggle in the wake of a devastating diagnosis. The husband, now in his late 50s, was found to have brain cancer nearly 10 years ago; he underwent treatment and beat the disease \u2014 only for it to come back very aggressively.<\/p>\n

\u201cHis doctor had written a letter stating that he had six months to live,\u201d Rehburg wrote.<\/p>\n

The man had a US$500,000 term policy; after some research on life settlements, he received an offer of US$380,000 in exchange for his policy, but his wife did not think it was enough. \u201cThe life insurance agent contacted me, explained the situation, and asked if there was a way to help the couple,\u201d Rehburg said.<\/p>\n

By the time she had discussed the issue with the agent, the husband had only three months left out of the doctor\u2019s initial six-month prognosis; closing a life settlement could require another 30 days. With the offer on the table, the couple stood to lose US$120,000 of the policy\u2019s face value \u2014 but they had bills they needed to pay urgently.<\/p>\n

Other options had been exhausted: they had maxed out their credit cards and already taken out a loan on their house. The agent had tried to swap their policy for a whole-life plan with critical illness or accelerated death benefits, but the carrier refused.<\/p>\n

Rehburg thought of other solutions. Because of the husband\u2019s health situation, the couple might be able to find a company willing to extend a loan against the death benefit of the policy.<\/p>\n

She also found a more suitable way to leverage the policy through a settlement. \u201cAn investor group offered to buy the policy for US$205,000 cash plus a US$250,000 retained death benefit,\u201d Rehburg said. Under that arrangement, the wife would realize a total of US$455,000 if the husband passed within the first 60 days; for every 30 days thereafter, the retained death benefit would see a slight decrease in value, with the structure of the arrangement almost emulating a loan with interest payment.<\/p>\n

\u201c[T]he client and his wife are deciding which direction they wish to take,\u201d she reported. \u201cAt least they now have several different options to choose from, which could help them realize a better return than simply selling the policy for cash.\u201d<\/p>\n

Read the original article at https:\/\/www.lifehealthpro.ca\/rss\/ <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Life insurance settlements can offer a compelling solution for policyholders who need quick access to cash. But in certain instances, a straight cash offer isn\u2019t the best way to address the need for liquidity...<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/16533"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=16533"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/16533\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=16533"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=16533"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=16533"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}