Frequently Asked Questions

Who is Involved in the Life Settlement Market?

The main parties involved in the life settlement market are the policyowner, insured, life settlement broker, and the intitutional buyer. A life settlement broker, such as Settlement MastersTM, may be an individual or company that works with a policyowner to negotiate offers on its behalf. The institutional buyer is the company that raises capital to purchase the life insurance policy.

What is The Life Settlement Industry

The life settlement industry and the actual selling of life insurance policies has been actively used for 20 years. Over this time, billions of dollars of life insurance has been sold between the institutional marketplace and the sellers of policies. Currently, there are eight states that require an insurance company to notify a client that a life settlement may be an option for them when they are going to surrender or lapse a policy as it may create more value for the policyowner. The life settlement industry is regulated in most states and brokers and providers are required to be licensed in the state the policyowner resides.

What is a life settlement?

Institutional Funds/Trusts are special entities established typically by pension funds, banks, hedge funds and investment companies for the purpose of purchasing life insurance policies as investments. The funds may own hundreds or even thousands of life insurance policies that are held within their portfolios.

Why would I sell my insurance policy?

1. You may have outgrown your need for the policy 2. You have new goals within your life’s plan 3. Your life insurance policy hasn’t performed as you expected 4. Your estate tax and business continuation plans have changed.

What are the main qualifying factors of a life settlement?

1. Age of the Insured 2. Health of the Insured 3. Type of Insurance Policy 4. Life Insurance Policy Premium 5. Life Insurance Policy Death Benefit 6. Insurance Company Rating

How does the process work at the Settlement Masters?

1. Evaluate the market value of the policy 2. Analyze keeping the policy versus selling it 3. Negotiate on your behalf for the highest offer and lowest expenses 4. Upon completion of the sale, provide the owner, insured and advisor with the Settlement MastersTM Client Compliance file

What do I need to provide to conduct a policy appraisal?

Settlement MastersTM will request certain basic information about the Insured and the policy to generate a preliminary value. If you decide to proceed to a formal appraisal, we will request more detailed information which includes access to the medical records of the insured and various policy illustrations to help you understand how you might be able to keep some or all of the policy death benefit, if you wish.

How experienced are the Settlement Masters™ team?

Our staff has over 50 years of experience, and is knowledgeable on life insurance contracts. We are able to thoroughly review your eligibility based on the qualification factors and determine if your life insurance policy is able to be sold.

How does Settlement Masters™ get the highest offer for me?

Settlement MastersTM specializes in getting multiple Institutional Trusts to bid on the purchase of every policy. When you have multiple parties bidding on the purchase of a policy, the likelihood is that the price will go up and you receive more.

Does this cost me anything?

We will review your policy and conduct appraisals at no cost to you. Our process of speaking with a licensed buyer for your policy is also free.

How does the Settlement Masters™ get paid?

We are compensated from the gross proceeds received from the institutional buyer. All fees and expenses associated with the sale of a policy are disclosed to you before the completion of the sale and are regularly below the industry standard fees.

Who purchases my life insurance policy?

Institutional Funds/Trusts that specialize in purchasing life settlement policies.

What if I am not interested after the policy appraisal?

You are not obligated to accept the offer if you are no longer interested.

What is the value of a Life Settlement?

Sometimes the value is somewhere between 30 and 50 percent of the actual death benefit of the policy. It truly depends on many factors including age, health, size of the policy and premium of the policy.

Why choose the Settlement Masters?

Reputation, Experience and Trust. We have been retained by trust companies, attorneys and accountants to do life settlements for their clients.

What if I want to work through my financial advisor?

We are able to work with anyone that you choose, including your financial advisor, insurance agent, lawyer, or family member.

Who pays my insurance premium after I sell my insurance policy?

The new buyer will be responsible for all future premium payments.

Is the life settlement industry regulated?

The industry is regulated, and both the provider and the broker, must be specifically licensed in order to conduct the life settlement transaction.

Is a life settlement taxable?

Many companies similar to us do not offer tax advice, but tax obligations will vary depending on your specific situation. We recommend that you consult with your tax advisor or attorney for more information.

Can I donate my insurance policy?

Yes, you are able to donate your insurance policy to charities

How long does the life settlement process take?

The preliminary valuation of your policy will take only a few days once we’ve had the chance to speak with the policyowner and insured. If you decide to proceed with our process, we expect that the medical analysis, bidding process and preparation and signing of the settlement documents may take 5 to 8 weeks. We communicate weekly with you so you will always feel well informed.

What are Institutional Funds/Trusts?

Institutional Funds/Trusts are special entities established typically by pension funds, banks, hedge funds and investment companies for the purpose of purchasing life insurance policies as investments. The funds may own hundreds or even thousands of life insurance policies that are held within their portfolios.

Key Terms & Definitions

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The material presented herein is designed to provide accurate and authoritative information in regards to the subject matter covered. It is prepared with the understanding that we are not engaged in rendering legal, accounting or other professional services. If legal or other expert assistance is required, the services of an advanced planning attorney or CPA should be sought. Securities offered through American Trust Investment Services, Inc. Member FINRA & SIPC. American Trust Investment Services, Inc. does not offer tax, legal or accounting services. Services are offered by The Rushmore Private Client Group. American Trust Investment Services, Inc. and The Rushmore Private Client Group are not affiliated companies.

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