Viatical Settlements - More Time

Stephen is a 43-year-old father of one. He is fighting colon cancer and does not want to give up because of his daughter...but the disease is winning. "My daughter is the most important thing to me," says Stephen. "I spend what time I have left with her." Stephen is a financial analyst, and his employer has been more than understanding and supportive. He is allowed to work when he is able, but he prefers to spend time with his "precious" daughter.

Financial problems are not the reason he chose to "loan-out" his policy. "It allows me to do the simple things such as sitting and watching my daughter swing," explains Stephen. "It gives me the luxury to go on living." Stephen explored several options when he was considering using his policy to obtain needed funds. "I called all the viatical companies and they sent me the literature -- many overnight. I spoke with the Lending Company, and I knew that this was the company that I wanted to use," says Stephen. As an accountant, Stephen realized the tax consequences of selling his policy, and many viatical companies avoided the question when he asked. "This program offered me a legal option not to pay taxes and realize more money," adds Stephen.

"I realize that I am not well, and I do not want people to think that I am giving up by using my policy prior to death," says Stephen. "I have set up a trust for my daughter, and I know that she will be provided for after my death."

Stephen wants to use the money to help him explore new pain management techniques. "The drugs have been affecting me, and I want to be clear when I am with my daughter. Last week, we were together. I got tired from the medication, and went to rest for an hour -- I slept the entire afternoon when I would have spent the time with her."

"I am not giving up hope that a miracle will happen, but I want to make sure that things are taken care of just in case," explains Stephen. This program has given Stephen "peace of mind."

Simmons Corporate Settlement

Simmons Corp. owns life insurance on its President and CEO totaling $10 million. The policies are mostly term insurance and the remainder have a cash surrender value of $800,000. Simmons is negotiating the company's sale to a strategic buyer whose last and final offer falls over $1 million short of the desired selling price. Simmons Corporation's lender wants the sale to go through and in discussions with its portfolio management committee has given more than passing consideration to the prospect of discounting its note to help make the sale a reality. Simmons is considering letting the policies lapse because the premiums are very costly and the management is absolutely certain that the company will be sold, The lender, aware of the Senior Settlement market, contacts a prospective buyer of the policies and is offered $1.5 million - a substantial premium over cash surrender value, After payment of taxes on this transaction, the Simmons Corp. nets $1.25 million, is able to adjust its sale price, the buyer closes the deal and the bank is repaid in full.

Chapter 11

A Midwestern manufacturer was operating in Chapter 11. The pre-petition lender had provided the DIP facility and felt it was adequately secured. As part of the process of submitting operating reports, the management consultant running the business thought she would confirm the cash surrender value of the key man insurance policy. She learned the policy had been fully borrowed against and was ready to jettison the policy because its annual premium was coming due. However, the bank's portfolio manager had read something about the possibility of converting the policy to cash. At the time of review, the insured was a 64-year-old in relatively good health and with no significant medical problems. The policy had no cash surrender value. The $750,000 policy was sold for $80,000 net of taxes.

Life Settlement INdustry News 06/20/05

Life Settlements and Real Estate Investing Cash from Life Settlements can boost real estate holdings.Many seniors do not realize that there are no restrictions on the use of their Life Settlement proceeds...

More About Premium Financing
04/26/05

Premium Financing. Affluent insureds can use leverage to buy life insurance using recourse and non-recourse premium financing. After two years, the coverage may be sold as a Life Settlement, or retained....

More About Premium Financing Life Settlement Questions Call 1-877-224-2200
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08/24/04 Life Settlements used for Estate Planning offer opportunities for professionals. More...


08/03/04 Life Settlement Market Benefits. What if a policyholder's preferences change. More...

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