There are many reasons why someone would sell their life insurance policy. The following are just a few of the reasons:

• It was originally purchased for estate liquidity. Perhaps circumstances have changed or new tax laws have caused the policy to be no longer required.
  
  
• New mortality tables have made older policies obsolete. Additionally, with the use of a survivorship policy owners can purchase more coverage for less money.
  
  
• The policy may be part of a buy/sell agreement for business purposes and the business
  has dissolved.
  
  
• The policy may have been in place to replace income in the early years and is no longer required.
  
  
• The policy may be a Key person policy, which is no longer needed due to separation or retirement.

The following are five actual case profiles that demonstrate the benefits of utilizing a life settlement in lieu of surrendering the insurance policy. We think you will agree that a life settlement is a valuable financial planning tool, which can benefit policy owners, brokers and agents.

Case #1
In October 2000, Senior Settlements purchased a 3,000,000 policy from a male age 74 for a gross purchase price of $1,240,000. The Seller of the policy sold the policy in order to purchase a survivorship policy, which was more economical than the individual policy, and it also met his financial planning needs. The amount received by the Seller was in excess of $800,000 over the cash value in the policy.

In this transaction the Seller received over $800,000 more than he would have if he surrendered the policy. He lowered his insurance premiums and satisfied an estate planning need. The agent received commissions on the sale of the life settlement in addition to the commission received on the sale of the survivorship policy. Additionally, the agent invested the $1,240,000 for the client and received additional compensation.

Case # 2
In a different transaction, Senior Settlements purchased a 5,000,000 policy from an 82-year-old male in March 2001. Our gross purchase price for this policy was $2,200,000. Unlike the first case, the Seller of the policy simply wanted to discontinue premium payments and cash in the contract. His cash value was $746,000 with premiums in excess of $200,000 annually. By using the life settlement option he received approximately $1,454,000 more than if he had cashed the policy in. The agent received commissions on the sale of the life settlement and on the investment of $2,200,000.

Case # 3
In this arrangement, we purchased two policies in December 2000 from the same Seller. Each policy was 2,500,000 on a 70 year-old male. We purchased each policy for $750,000. The first policy had annual premiums of $90,000 and a cash surrender value of $166,164. The Seller received approximately $583,800 more then if he had cashed in his policy and he eliminated his premium payments. In the second policy, the premiums were also $90,000 and the cash surrender value was $166,300. The Seller received monies in excess of $583,700 more then if he would have cashed in his policy and he reduced his debt by doing away with the annual premium payments.

The sale of both policies was very beneficial to the Seller and the agent. The gross purchase price was $1,167,536 more then the $332,464 he would have received by cashing in his policies. The agent received commission fees on the sale of the life settlement and on the investment of $1,500,000.

Similar to Case #1, this Seller also purchased additional life insurance.

Case # 4
In January 2001, we purchased a 400,000 policy on a 66 year-old male. This policy had $0 cash surrender value and annual premiums of $8,000. An immediate payment was due at the time of purchase or the policy was going to lapse. Our gross purchase price was $140,000 and we made the immediate payment to keep the policy in force. With $0 cash surrender value and the policy ready to lapse, this was a very profitable transaction for the Seller. He received an offer of $140,000 more then what was available to him in his policy and the broker received commission fees on the sale of the life settlement.

Case #5
In July 2001, we purchased a 300,000 policy on an 81 year-old male for a gross purchase price of $98,000. The cash surrender value was $31,165 with $4,295 premium payments due quarterly. The Seller received an offer of $66,835 more then if he would have cashed in his policy. The Seller simply wanted to discontinue making premium payments and was able to do so without taking a loss. The broker was able to give his client a beneficial alternative and receive commission on the life settlement.