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  Frequently Asked Questions About Life Policy Settlements

What is a life settlement?

A life settlement is the sale by a senior policy owner of their life insurance policy. The policy is sold to a settlement company for a cash payment that exceeds the surrender value. In this way a secondary market is created for life insurance policies.


Why sell a life insurance policy?

Traditionally if a life insurance policy was no longer needed there were only two options a) surrender the policy for the cash value or b) allow the policy to lapse. Now you can sell your policy for more than the cash value. The majority of policies are taken out for income protection and your circumstances may change so that the policy is no longer needed or premiums have become excessive. Now you have more choices and more cash to make those choices. LPA’s Lifestyle Choices gives you the choices to suit your needs.

The hidden value in your life policy can now be unlocked giving you the additional cash for all of those needs. Your changing circumstances mean that you may have simply outgrown the need for the coverage or there is a more appropriate coverage for you.

It’s your choice and your lifestyle –

LPA’s Lifestyle Choices. Sale proceeds are yours to use any way you wish.


Is my policy suitable?

Most policy types are suitable.LPA buys Universal, Whole, Variable, Term and Survivorship.


What will I get for my policy?

If your policy is suitable, we will always pay more than the surrender value, releasing the policies hidden fair value to you. The amount we pay will vary from policy to policy based upon your age, health, premiums and the policy. The Policy Check form gives you an indication of whether your policy is likely to be suitable.


How long does it take?

We can get a fast and fair LPA Lifestyle Choice to you in 3 – 5 days once we get a completed application, medical records and a copy of your policy.


How safe is LPA’s Lifestyle Choices?

An escrow agent holds your policy and transfer pending receipt of the sale proceeds. The sale proceeds are released as you direct upon registration of the transfer of the policy. The timing of this will vary according to the time that the life insurance company takes to process the transfer, most times no longer than 30 days.

We do everything we can to get the cash into your hands as quickly as possible.


Do I need to pay any further premiums?

No. You have no further obligations under the policy.


What about my privacy?

We maintain the highest standards of confidentiality. We only deal with institutional investors and your personal details are kept confidential at all times. Strict protocols are in place to ensure your confidentiality and privacy.


Can I change my mind?

You can cancel the deal up to 15 days after receipt of the sale proceeds. We will transfer the policy back to you and you need to return the sale proceeds plus any premiums we may have paid.


What’s the tax situation?

Generally proceeds are;

  • Tax free up to the amount paid in premiums;
  • Taxed as ordinary income up to the cash surrender value; &
  • Taxed as capital gains on the excess.

Your circumstance may vary and you should consult your tax advisor.


How do I get started?

  • Review your needs with your insurance agent or financial advisor
  • Complete the Policy Check
  • Complete and submit the Application

If the policy is suitable we will make a LPA Lifestyle Choice offer within 3 – 5 days of receipt of all the details we need. You are under no obligation to accept

– it’s your choice. If you accept the offer, sign the transfer papers and return with your policy to the escrow agent.

It’s simple, fast and fair. It’s your choice.


Is this legal?

Yes. You are the legal owner of the policy and you can deal with it and the proceeds as you please.

 

   



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