To better demonstrate the successful utilization of life settlements, I offer an example of how an unneeded life insurance policy ultimately was translated into more preferable coverage. Please note that this example is for illustrative purposes only and does not represent any specific life settlement case either presently or in the past.

Situation: An individual, age 73, has a $2 million life insurance policy with little cash value and a recent reduction in estate tax liability that, combined with effective gifting strategies, render the policy unnecessary.

Solution: Upon recommendation by his financial planner, the gentleman utilized the $720,000 settlement to fund long term care insurance on himself and his wife through an immediate annuity. He was pleased to “find a market” for his life insurance policy, which provides capital to fund other insurance needs.

–A. Mark Berlin Jr.


Reproduced from National Underwriter Edition, March 17, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.