Understanding The Life Settlement Process As It Unfolds

                                                                                         

As the life settlement market grows, more and more people interested in potentially selling a life insurance policy are familiarizing themselves with this burgeoning market. How much a policy might be worth on the secondary market, taxation issues, and how long the process itself might take are just a few of the questions on the table for many. The answers, while not set in stone, do evolve from a set of variables one can expect to experience along the way. MP Hanley and Associates is happy to share those variables with you in order to keep the surprises to a minimum.

There are many factors an institutional investor will consider in determining the value of your life insurance policy. The face amount of your policy, the accumulated cash value (if any), life expectancy, and the minimum premium required moving forward are all examined and considered before a cash determination is made. As such the settlement process can take a while – usually between 90 to 120 days. The process itself usually follows a familiar pattern. An insured’s medical history is consolidated and studied by an actuarial firm to determine life expectancy. At the same time financial models are being constructed and considered to determine a possible return to the investor. Once compiled, this information lands on the desks of multiple providers working with investors. Once an offer is made, MP Hanley negotiates with the top offers to secure a maximum payout for our client.

life insurance policy Tax issues concerning a life settlement are, shall we say, not for beginners. In other words, consult your tax professional immediately upon beginning the process. Generally speaking the taxable income may be the difference between the settlement amount minus the cost basis of the policy. The difference between the settlement amount and the cash surrender value may also be treated as a capital gain in certain circumstances. This is just the tip of the iceberg, and taxation is definitely an area where you’ll want all your bases covered. That said, keep your tax professional close at hand.

Understanding the life settlement process prior to becoming involved in it will reduce stress greatly as the process unfolds. Don’t be afraid to ask questions. A working knowledge of the process is the only true way to decide if the secondary market is the place for you.

About the author:
Hanley & Associates, Inc. was founded Jackson B. Hanley in 1954. Michael Hanley joined his father in 1968. Michael Hanley has extensive knowledge as a broker/dealer for all securities, mutual funds, variable life and variable annuity product sales. For more information visit http://www.mphanley.com.

Article Source: http://www.Free-Articles-Zone.com