Frequently Asked Questions
Life Insurance Settlements, Life Settlements and Viaticals
Q: Why sell my policy?
Q: Why shouldn’t I deal only with my life insurance company?
Q: How much cash can I get for my policy?
Q: Who buys the policy?
Q: Who makes the insurance policy payments once it is sold?
Q: Who is the beneficiary once my policy is sold?
Q: Once I sell my policy, do I have any further obligations?
Q: Are there any special tax considerations?
Q: How does TriMark Capital Funding, Inc. get paid?
Q: What types of insurance policies can be cashed in?
Q: What happens to the policy when I pass away?
Q: How do I qualify?
Q: Is a medical exam required?
Q: What key terms should I know?
Q: What’s the difference between “surrender value” and “ fair market value"?
Q: Does my state regulate Life Settlements?
Q: Why is it important to know the fair market value of my life insurance policy?
Q: How much money can I expect to receive for my life insurance policy?
Q: What is involved in the process?
Q: What if I have additional questions?
Why sell my policy?
There can be as many reasons for no longer needing a policy as there are policyholders, but the main reasons most people sell their life insurance policies include:
1. The policy is about to lapse — As policyholders grow older, they may simply find it too inconvenient or too expensive to continue paying the premiums, and thus prefer to let the policy lapse. But before you consider this, find out your policy’s current value, because if you let it lapse you could be leaving money on the table — possibly tens of thousands of dollars that rightfully belong to you.
2. The beneficiary is provided for by other means — Life insurance policies are often taken out at a time in your life when there is a greater need for coverage, such as when your children are young. As you grow older and build net worth, and as children leave home, the need for the policy lessens.
3. The policy is no longer needed — Business owners who sell their businesses may no longer need the policy because it was taken out primarily as protection for their firm. For others, the beneficiary may have passed.
4. Premiums have become a burden — Senior-age individuals on a tight budget may find it increasingly burdensome to pay the premiums on their life insurance policies. If that is your situation, don’t simply let your policy lapse, cash it in.
5. Cash is preferred to coverage — Many seniors today are faced with mounting expenses: Home repairs... Assisted living... Credit card debt. You may even need cash to help family members with their financial obligations. Whatever your need, selling your life insurance policy can be a viable option for getting the cash you require.
Why shouldn’t I deal only with my life insurance company?
Truth be told, life insurance companies act in THEIR best interest, not YOURS. They have no incentive to pay you fair market value for your policy. If they do, they lose money. Surrendering your life insurance policy back to your insurance company, and letting them set the surrender value would be like selling your home to someone and letting them dictate whatever sale price they wanted, regardless of the fair market value.
TriMark Capital Funding, Inc. will secure top dollar for your life insurance policy. Before you make a final decision, seek an independent appraisal. At TCF that appraisal is free for qualified candidates.
How much cash can I get for my policy?
Your policy’s Life Settlement cash value is determined by several factors, including the amount of the policy’s face value, the age and health of the policyholder, and the financial stability of the issuing life insurance company.
It is possible that you can get substantially more for your life insurance policy in the secondary marketplace than you could if you accept its cash surrender value as stated by your insurance company. Even term life insurance policies that your life insurance company says have no surrender value may have a significant cash value in the secondary market.
Who buys the policy?
Investors. Financial institutions and investor groups are attracted to the Life Settlement marketplace because it provides them with the potential for greater returns than they can receive from, for example, money market funds, the stock market or the current real estate market.
Who makes the insurance policy payments once it is sold?
The buyer of your policy assumes full responsibility for all future payments. You never see another bill, reminder or late notice.
Who is the beneficiary once my policy is sold?
The buyer of your policy becomes the beneficiary.
Once I sell my policy, do I have any further obligations?
No. Selling your insurance policy is like selling any other asset you own outright, in that the cash you receive from the sale is yours. All rights and obligations attached to the policy are transferred to the new owner.
Are there any special tax considerations?
TriMark Capital Funding, Inc. does not engage in the practice of rendering financial, tax or legal advice. As with any other major financial decision, we strongly recommend that policy holders seek the advice of your accountant, attorney or tax professional for any tax considerations associated with your life settlement. With that said, typically any amount paid for a policy in excess of the cash surrender value is usually treated as a capital gain and the cash surrender value in excess of the basis in the policy is usually treated as ordinary income.
How does TriMark Capital Funding, Inc. get paid?
There is no cost to you for our services. TriMark Capital Funding, Inc. receives a referral fee from the buyer of your policy. This referral fee DOES NOT affect the amount of your cash settlement.
What types of insurance policies can be cashed in?
Almost all policies. Whole life. Universal life. Second-to-die. Term insurance. And others. To find out if your policy qualifies, call us at 1-877-932-2628 or request an appraisal.
What happens to the policy when I pass away?
The buyer of your policy will collect the proceeds upon the insured’s passing.
How do I qualify?
Minimum requirements are:
-
You must be age 70 or older for most types of policies. We will consider any life policy when the insured is living with a serious illness, regardless of age. Medical records will be needed to complete the application process.
-
Your life insurance policy must have a minimum death benefit value of $50,000.
-
We’ll also need to know the type and amount of your life insurance policy, your exact age, any health issues or concerns, plus a few other facts.
Is a medical exam required?
Our clients are not asked or required to take a medical exam, although you may be asked to supply medical records in certain cases. Your confidentially is assured.
What key terms should I know?
Life Settlement: The sale to a third party of an existing life insurance policy belonging to someone who is age 70 or over and is in generally good health for their age. The sale is for more than the policy’s cash surrender value but less than its net death benefit, and represents the policy’s fair market value.
Viatical Settlement: The sale to a third party of an existing life insurance policy belonging to someone who is terminally or chronically ill. The sale is for more than the policy’s cash surrender value but less than its net death benefit, and represents the policy’s fair market value.
These terms are not used in a consistent manner by all states. For example, some states use the term “Viatical Settlements” to refer to the sale of all life insurance policies, regardless of whether the insured is terminally ill, chronically ill, or not. And at least one state uses the term “Life Settlements” to refer to all transactions, including ones in which the insured is terminally or chronically ill.
What’s the difference between “surrender value” and “fair market value"?
The amount of money you receive. The fair market Life Settlement cash value, may be significantly greater than the cash surrender value stated by your insurance company.
Does my state regulate Life Settlements?
Life Settlements are regulated by state insurance departments. Some states have enacted statutes addressing the sale of life insurance policies. Other states do not regulate the transactions. Of those states that regulate the transactions, most require both the Viatical/Life Settlement Broker (facilitator of the transaction) and Viatical/Life Settlement Provider (purchaser of the policy) to be licensed. Rest assured that TriMark Capital Funding, Inc. only works with brokers and providers that maintain proper licensing.
Why is it important to know the fair market value of my life insurance policy?
Knowing the fair market value of any asset — whether it is real estate, personal property, life insurance, or any other type of investment — enables informed decision making. Before selling any asset, including your life insurance policy, it can be financially prudent for you to seek an appraisal of the fair market value.
How much money can I expect to receive for my life insurance policy?
You will receive immediate cash funds determined by:
- Estimated life expectancy and medical condition.
- The amount and type of life insurance coverage.
- Amount of the premiums necessary to keep the policy in force.
- Cash value build up in the policy.
- Credit and solvency ratings of the insurance company.
- Prevailing interest rates.
- Loans, if any, taken against the policy.
What is involved in the process?
It is very easy. Simply fill out the application provided for you. Our underwriters will review the insurance policy and the medical records provided by the insured’s doctor. If your application qualifies, an offer will be prepared for you. No additional medical examinations for the insured are required. The process is very, very simple.
What if I have additional questions?
You can call us toll-free at 1-877-932-2628.
