Life Settlement Examples

Many of our clients are asking for real case scenarios when it comes to selling their life insurance policy. This is an important financial decision and although we suggest using our custom-built life settlement calculator, it can be clearer to illustrate the process with life insurance settlement examples. Below is a list of possible scenarios. 

Example 1

Linda is an 83-year-old woman with a $1,000,000 whole life policy with annual premium payments of $42,321. With increasing premiums every year, she contacts her insurer that offers a surrender value of $46,567. Through a life settlement, she was able to receive $310,00, or 31% of her death benefit.

Example 2

Bob and Stacy are 65 and 67 years old, respectively. They own two different whole life policies of $125,000 each, which they contracted 25 years ago. They have various retirement projects they would like to finance with a life insurance settlement. Based on their medical records, premiums and death benefit, a broker is collecting three offers ranging from $10,000 to $25,000 for each policy. Bob and Stacy review the offers and choose to not go forward with a life settlement.

Example 3

John is a 72-year-old man with a $750,000 whole life policy that he purchased 20 years prior. Since he turned 70, the premiums have considerably increased and are now a financial burden to his day-to-day life. His children and other family members are financially stable. John would like to renovate his house, travel around the world, and enjoy his retirement. Through a life settlement broker, he receives an offer for 30% of the death benefit, or $225,000.

Example 4

Sue is a healthy 58-year-old woman with a 20-year term life insurance policy. The policy expires in 5 years. Sue saw a TV commercial about life settlements, and she decides to sell it to potential investors. After reviewing her policy, the life settlement broker realizes that the policy is not convertible into a permanent life policy. With Sue’s health being excellent, investors are not interested in purchasing it.

Example 5

Robert is a 69-year-old man with a 20-year term life insurance policy, which has a death benefit of $350,000. Robert’s policy is not convertible into a permanent life insurance policy. Robert has many health issues and he is looking for a life settlement to help with his medical expenses. After reviewing Robert’s medical records, a life settlement broker finds investors that are willing to purchase his life insurance policy. The best offer amounts to 40% of the death benefit, or $140,000. Robert accepts and receives the funds within a few weeks.

Example 6

Barbara is a 52-year-old woman who recently came across an article about life settlements. She has had a whole life policy for 25 years and she could use some financial support now. She completes an application with a life settlement broker, but she does not have any significant health issues and she is in her early fifties. Therefore, despite contacting multiple investors, the life settlement broker is not able to find a valuable offer. Barbara will have to wait before selling her policy to maximize its price. 

life settlement examples

Finally, if you have any questions about the life settlement examples or your personal policy, please fill out our form to get an instant estimate and a member of our team will contact you shortly.

Disclaimer: Those scenarios are fictional and do not guarantee a similar result in a similar scenario. A life settlement is based on the nature of your policy, your health status, and the policy premiums. Since those three factors vary, there is a wide range of outcomes. Contact us to learn more.

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