Life Settlements and Business
Life insurance settlements allow businesses, retiring exectuives and business owners the opportunity to generate liquidity from a dormant business asset.
Life settlements are an ideal strategy for businesses and business owners to recoup valuable capital out of an unneeded insurance policy to give them increased financial flexibility.
When would a life settlement be appropriate for a business or professional application?
- Liquidation or reorganization of the business assets
- Policy performance is below expectation & life settlement proceeds used for replacement policy
- Buy/sell agreement dissolved and policy is no longer required
- Deferred compensation payout requires policy liquidation
- Company-owned policies on key employees no longer needed
- A "key man" policy is no longer needed or required by bank or partners
- Retiring executive retains policy, but the insurance is unneeded/unwanted
How can a business benefit from life settlements?
- Immediate access to capital and liquidity
- Debt service or debt retirement
- Life settlement proceeds used to buy replacement policy for one that is underperforming
- Eliminate costly premiums for key man policies that are no longer needed
- Eliminate premium obligations for policies used to obtain bank loans or credit
- Executive who retains policy after retiring cashes out unwanted or unneeded insurance
Life Settlements provide access to valuable capital and liquidity?
Most often change within a business organization can create an opportunity for a life settlement. Key personnel leaving the company, business sale, debt retirement or even bankruptcy can produce the chance to sell a life insurance policy on the secondary market. Life settlements offer access to fair market values of this important business asset. In some circumstances the policy remains with an individual even after they have left the company, but the insurance policy is unwanted or unneeded. During any of these circumstances it is prudent to have an independent valuation of the policy to determine the best course of action with the asset.
Businesses and trusted advisers that recognize these events as a chance to maximize their dormant assets will be rewarded with a greater return and bottom line.