FREQUENTLY ASKED QUESTIONS
Life settlements can be a powerful financial option for those looking to sell their life insurance policies for cash. Here are answers to common questions about viatical life settlements
What is a life settlement and how does it work?
A life settlement is the process of selling your life insurance policy to a third party for a lump-sum cash payment. Instead of surrendering the policy for little or no value, you can receive a payout higher than the surrender value but less than the policy’s death benefit. The buyer assumes responsibility for paying future premiums and becomes the policy’s new beneficiary.
Who qualifies for a life settlement?
To qualify for a life settlement, you typically need to be aged 65 or older with a life insurance policy that has a death benefit of $100,000 or more. However, individuals under 65 may also qualify if they have experienced significant health changes since the policy was issued.
How much money can I get from selling my life insurance policy?
The payout from a life settlement varies depending on factors like your age, health, policy type, premium costs, and the death benefit. While each case is unique, the average payout can be up to 30% of the policy’s face value.
What types of insurance policies can be sold in a life settlement?
Many types of policies are eligible for life settlements, including universal life, whole life, and convertible term life policies. Non-convertible term policies may not qualify unless paired with a significant health change. Each policy type comes with specific conditions that impact eligibility, you can contact LifeRoc to help determine if your policy qualifies.
Can I help my parents sell their life insurance policy through a life settlement?
Yes, as a beneficiary or family member, you can assist your parent in exploring a life settlement. If they no longer need their policy or are struggling with premium payments, you can work with LifeRoc Direct to navigate the process on their behalf. We guide families with transparency and care, ensuring your parent gets the maximum value for their policy while aligning with their financial and legacy goals.
What happens to my beneficiaries when I sell my life insurance policy?
When you sell your life insurance policy in a life settlement, the buyer becomes the new owner and beneficiary of the policy. This means your original beneficiaries will no longer receive the death benefit when you pass away. Instead, the buyer will collect the policy’s full death benefit.
However, a life settlement can still benefit your loved ones in meaningful ways. By selling your policy, you can access a substantial cash payout now.
How long does the life settlement process take?
The life settlement process typically takes 4 to 8 weeks, depending on factors like policy complexity and document collection. At LifeRoc Direct, we streamline every step, handling medical records, policy documentation, buyer negotiations, and the closing process to ensure you receive your cash payout as efficiently and quickly as possible.
What costs or fees are involved in a life settlement?
At LifeRoc Direct, we eliminate 3rd party broker commissions by connecting you directly with our affiliated licensed life settlement provider. LifeRoc Capital who has direct accesss to an extensive network of funders. This means you will receive 100% of the Gross Purchase Price offer from your settlement without having to pay any 3rd party broker commission.
Can I sell part of my life insurance policy instead of the whole thing?
Yes, a partial life settlement allows you to sell a portion of your policy while retaining some coverage. This can be a good option if you want cash now but still need life insurance protection for beneficiaries.
Are life settlements taxable?
Yes, life settlement proceeds can be subject to taxes, but the tax treatment is often favorable compared to other income sources. The taxable amount depends on how the payout compares to the premiums paid and the policy’s cash surrender value. Generally, the portion exceeding the cash value but below the premiums is taxed as ordinary income, while the remaining amount is taxed as a capital gain. * LifeRoc does not provide tax advice, please consult a tax professional.
Can a life settlement be used to pay for long-term care or medical expenses?
Yes. Many individuals use the proceeds from a life settlement to cover healthcare, long-term care, or medical expenses. The cash from a life settlement can be used any way the policyholder chooses, including healthcare or investing, traveling, home improvements, helping family, etc.
What happens if I change my mind during the life settlement process?
At LifeRoc Direct, we offer a no-obligation policy appraisal, and you can withdraw from the process at any time before the transaction is finalized.
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OUR PROMISE TO YOU
LifeRoc Direct is the industry leading life settlement resource and your satisfaction is our top priority! We are so confident in the quality of our team and work that we provide our clients with this LIFEROC PROMISE: We will provide you with a free up-front policy appraisal so you can make informed decisions about whether to keep, or to sell your policy based on current financial opportunities and needs. There is never any obligation to sell, and prior to final closing you can cancel at any time, for any reason.
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