You likely purchased a life insurance policy to protect or benefit family members. Now you may be facing increasing premiums while at the same time having to manage your retirement.
All too often many seniors lapse or surrender their life insurance as their needs or financial situation changes. Many do not even know all their options after sinking years of premium payments into their policies.
For seniors who may want or need to keep their coverage, there is the Retained Benefit Settlement option that can maximize the current fair value of their policies and provide a lasting benefit.
A Retained Benefit allows the policy owner to keep a lower, but still desired, level of coverage inforce without any future premium payments.
Here is how it works.
After evaluating your policy, we arrive at the secondary market value which is presented as either a cash amount or a retained benefit. The difference between the two is the time value of money.
Instead of discounting the value all the way back to today with a cash settlement, we can offer an amount to be paid in the future that is typically three (3) times larger or more.
A one million dollar policy has a present value of $200,000; this is the cash settlement. In this case, the retained benefit would be $600,000 in coverage maintained. The purchaser will continue to make all the premium payments for the full one million dollar policy eliminating the seller’s premium and providing a lasting benefit.
One of the best parts is, the retained benefit is paid directly to your chosen beneficiaries by the insurance company. The policy seller names one or more irrevocable beneficiaries which are recorded at the carrier level, ensuring the timely payment and protection of the retained coverage.