What is a life settlement?
A life settlement is the sale of a life insurance policy to a financial institution or other funding source for more than the cash surrender value of the policy. The purchaser then assumes the premium payments and becomes the beneficiary of the policy.

How does it differ from a viatical settlement?
A life settlement is typically used by seniors over the age of 70, and a viatical settlement (the sale of a life insurance policy of an individual suffering from a terminal illness) is used by someone with a life expectancy of two years or less.

How do I know if a life settlement is for me?
A life settlement may be right for you if:

• You are over the age of 70 with a life insurance policy of at least $500,000
• You no longer have beneficiaries
• You do not intend to leave an inheritance to beneficiaries, or your heirs have no need for money from a life insurance policy
• You have no need to allocate funds to pay for post-death expenses such as estate taxes
• You have no need to protect a business
• You are paying high insurance premiums that no longer justify the value of the policy
• You have more insurance than you need
• You are considering letting your life insurance policy lapse

Why should I sell my life insurance policy?
A life settlement can help you make better use of the capital currently tied up in your life insurance policy. Rather than paying for unneeded insurance or dropping the policy, you can sell your policy to a life settlement provider.

Is this for all kinds of policies?
Life settlements can take place with all types of insurance policies including term, universal, whole life and survivorship. The policies can be owned by individuals, businesses or Irrevocable Life Insurance Trusts.

How does the transaction work?
Once Rumson Capital receives a completed life settlement application, along with the appropriate medical and insurance information, it usually takes 72 hours for us to determine the current market value of the policy. This value may be substantially greater than the policy’s cash surrender value.

Who benefits from a life settlement?
Life settlements give seniors the resources to enjoy their retirement with new financial freedom. Money from life settlements can be used for charitable donations, or to buy a better-performing insurance policy, make other investments, or give cash gifts to family members.

The purchaser of the life settlement (typically one of a few major multinational banks) assumes the premium payments and becomes the beneficiary of the policy.

How is the transaction taxed?
In general, the proceeds from a life settlement are:

• Tax-free up to the amount invested
• Taxed as ordinary income up to the cash surrender value
• Taxed as capital gains above the cash surrender value

Is the transaction confidential?
All Rumson Capital life settlement transactions are completely confidential. Any personal information we obtain throughout the process is not used for any other reasons. Additionally, only those Rumson employees directly involved with a case are permitted to view its information.

How much will the owner be paid for the policy?
This depends on a number of factors, including:

• Age
• Premiums
• Overall physical health
• Type of policy
• Insurance company rating
• Policy size
• Competitive bidding

Are there any restrictions on how the funds from a life settlement can be used?
No. Money from life settlements can be used to make other investments, give cash gifts to family members, donate to charities, or just live life to the fullest. Moreover, a life settlement in no way precludes seniors from applying for new, more appropriate and possibly more efficient coverage immediately or in the future.

For more information, please complete our sign-up form, or call our office at 215.886.8433.