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Specialized Products

Life Settlements

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A life settlement is the sale of an existing life insurance policy to a licensed buyer for an amount greater than the policy’s cash surrender value and less than the death benefit. Proceeds can be used to fund long-term care, retirement, gifts, or other financial priorities. A life settlement may be a suitable option when coverage is no longer needed, premiums are no longer affordable, a term policy is nearing conversion, or trust and business circumstances change.  

  • Premiums become a strain, or a lapse is likely.
  • The original need has changed (kids launched, debt repaid, business sold).
  • Term approaching conversion and no need for permanent coverage.
  • Trust, business, or estate design has shifted.
  • Health has declined, which can increase a policy’s market value.

Typical markers include age 70 or older, or a significant medical impairment, a face amount of $100,000 or more, and a documented review that evaluates suitability and alternatives.

  1. Vetting the opportunity
     Age and health screen, face amount, and appropriateness review. 
  2. Information gathering and market survey
     HIPAA authorization, in-force illustrations, outreach to qualified buyers to gauge viability. 
  3. Auction and negotiation
     We coordinate a competitive bidding process and negotiate until the top offer is established. 
  4. Offer and acceptance
     Buyer presents price, structure, disclosures, compensation, and escrow instructions for signatures and any required notarizations. 
  5. Verification
     Buyer confirms information with the owner, insured, beneficiary, and carrier, and requests any missing items.
  6. Sale and funding

Proceeds move to third-party escrow, ownership and beneficiary changes are processed by the carrier, confirmation is received, and funds are released to the client and agent.

Life Settlements with SPG

Documents you will need to start

  • HIPAA authorization signed by the insured
  • Policyowner authorization to request in-force illustrations
  • Recent medical records
  • Current policy statements (for pricing and offer structuring)

Advisor talking points

  • If this policy were cash today, would that improve the client’s financial plan more than keeping it in force?
  • What is the client’s intent for the policy and are premiums still appropriate for that intent?
  • If the client is considering lapse or surrender, have we compared expected settlement value to surrender value and other options?
  • If it’s a term policy, would a settlement provide more value than converting it or letting it lapse?

Key considerations

Life settlements are regulated at the state level. Suitability, disclosures, and privacy requirements apply. Tax and legal outcomes vary by client, so coordination with the client’s advisors is essential. Settlements may affect eligibility for certain benefits or planning strategies. We do not provide tax or legal advice.

Contact Our Experts

Need help screening a case, coordinating the auction process, or comparing settlement value versus alternatives? Our team will map viability, organize the market, and manage each step through funding and change of ownership.