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What is a Senior
Settlement?
A Senior Settlement
is the sale of an
existing life insurance policy to a Funder for a discounted portion
of the current face amount after subtracting the value of any loans
that may exist on the policy. Qualified
applicants usually have a life expectancy of 3
to 15 years. An applicant can be in average older age or declining
health.
What is a
Viatical?
Viaticals differ from Senior
Settlement is that the insured has a medically diagnosed life
expectancy of 24 months or less or may be currently suffering
from two or more restriction of ADLs (Activities of
Daily Living).
What is needed to
qualify?
Step
One is to click "Apply Right
Now" and complete the simple questionnaire. You will be
notified if the Funder's underwriters will consider your application
for acceptance. There is no obligation on your part. Step two will be fill out
an authorization request form to obtain medical
information from your physician. Step three is
to make a copy of your life insurance policy and send it to
the Funder's underwriters. Step four after
approval, you will be given an offer which you can either
accept or decline. The whole process takes about 60 to 90
days depending on how long it takes to collect the information and
submit it for underwriting approval.
What if I have Group Term
Insurance?
Group term
insurance usually has only a 31 day grace period after retirement or
termination of employment in which to convert to a permanent Whole
Life plan. The insured must convert the Group Term insurance to
permanent Whole Life plan in order to continue the coverage after 31
day grace period. It is advisable to exercise your guaranteed
conversion rights on the Group Term insurance plan if you
plan to consider utilizing the Whole Life policy for a Senior
Settlement offer.
Can I have more than one
policy?
Yes, however the total face
amount of all policies must total over $50,000 to be
considered.
Do I have to pay Taxes on a Senior
Settlement?
The proceeds from a Senior Settlement are
generally income tax free up to the amount invested by premiums in
the policy. The difference between that amount and the cash
surrender value is generally taxable as ordinary income.
Amounts in excess of cash surrender value are generally taxed
as Capital Gains. Please consult your accountant or financial
advisor for details.
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