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Many types of life insurance policies
have the potential to become life settlements,
however, the ideal would be a
universal life policy issued over two
years ago, but not so long ago that the
cash value represents a large percentage
of the face value. The issuing
company must be A rated or better.
The premium to face ratio should be
low and the policy face must be at
least $250,000. As the candidate considers
his overall financial plan, the
policy must no longer be needed or
wanted. The ideal candidate would be
a male, age 70 or older, whose insurance
policy has no outstanding loans.
Health is the determining factor in the
qualification process. Whether a senior
is 65 or 85, they must have experienced
a substantial decline in health
since issuance of their policy, but not
to the extent of terminal illness.
Healthy seniors under the age of 65 do
not qualify.
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“The professional or
fiduciary obligations
of financial advisors
now include the need
to treat life insurance
policies as a fully
evolved property on a
par with the client’s
other financial
assets.”
Trusts & Estates
November 2002 |
