Life Insurance Settlements and Premium Financing of Life Insurance Policies Frequently Asked Questions, FAQ

4.: What happens to my life insurance policy after I enter into a life settlement agreement?

12.: If I get a life insurance policy with the premiums financed, what are my options when the loan matures?

1. What is a life settlement?: A life settlement allows a life insurance policy owner to sell his unwanted or unneeded policy to a third party for more than the cash surrender value offered by the insurance carrier. The purchaser becomes the new beneficiary of the policy and pays all subsequent premium payments.

2. What is the cash surrender value?: Cash surrender value refers to how much your life insurance carrier will pay you if you decide to discontinue your life insurance policy with them. This does not happen automatically if you stop making your premium payments. You must communicate with your carrier. Typically, surrender values are paid at pennies on the dollar of the face value of your policy regardless of how long or how much you have paid in premiums.

3. What does it mean to let a life insurance policy lapse?: Some life insurance policy holders find themselves in a position where paying their monthly premiums becomes impossible for them. If they stop paying their premiums without communicating with the insurance carrier, their policy will eventually "lapse" or terminate. In this situation, the policyholder will not receive any compensation in the form of a surrender value.

4. What happens to my life insurance policy after I enter into a life settlement agreement?: A life insurance policy that has been "settled" or sold to a third party still exists but with a new beneficiary who pays the premiums. Only consider a life settlement if you no longer need life insurance because it could limit your ability to purchase additional coverage.

5. With a life settlement, who is buying my life insurance policy?: Life settlement investors are typically large financial institutions that hold several policies as part of their portfolio. You have a right to know who is purchasing your life insurance policy. Ask your life settlement broker before you sign an agreement.

6. Is a life settlement right for me?: A life settlement, or selling your life insurance policy to a third party, may be right for you. If you are over 65 and no longer need your policy, or if your premiums have become unaffordable, you should talk to an advisor to see if a life settlement is a smart choice for you.

7. Consider a life settlement if:

You are over 65 years old
You have outlived your beneficiaries
You no longer need your policy and have a financial hardship
You have considered surrendering your policy due to difficulty making your premium payments
You need funds for medical expenses

8. How do I know if I qualify for a Bentley Life Settlement?: To qualify for a Bentley Life Settlement, you should be at least 70 years old with a life insurance policy that has been in place for at least two years. The face value of your policy should be $100,000 or more. Use our Bentley Life Settlement Qualifier to determine how likely you are to qualify and call a Bentley Life Settlement Advisor at 800-487-2274 to discuss your particular situation.

9. What is the settlement value of my life insurance policy?: After you know you are eligible for a life settlement, your application is negotiated with up to 25 financial institutions to obtain the best offer. Several factors affect the amount you will be offered including your age, your life expectancy, and the face value of your policy. Read some of our case studies for real life examples of Bentley Life Settlement clients.

10. What are Bentley's commission fees?: Bentley Life Settlements is the completely transparent life settlement company. We always share with you our commission structure. So, you'll always know where you stand. Commission fees are based on the face value of the policy. For policies between $250,000 and $800,000, our commission percentage is 3-6% of the face value; for policies between $800,000 and $3 million, our commission percentage is 2-5%; and for policies over $3 million, our commission percentage is 1-4% of the face value. Every life settlement situation is unique. Exact percentages are finalized based on two factors: final gross offer from the purchaser and complexity of your particular case.

11. What does "Premium Financed" mean?: Seniors who wish to purchase a life insurance policy but who want to leverage their cash position can apply to have the premiums financed by a financial institution. At maturity, the insured may maintain the policy by paying back the loan and assuming future premiums or sell the policy if there is a willing buyer.

12. If I get a life insurance policy with the premiums financed, what are my options when the loan matures?: Some seniors qualify for a life insurance policy with the premiums financed. When the loan matures in two years, you have several options. You can maintain the policy, sell (settle) the policy, or discontinue the policy. Talk to an advisor to determine the attributes of each.

13. How long will it take to complete my Bentley Life Settlement?: Typically it takes between two and four months to settle your existing policy with Bentley Life Settlements. This time frame can be affected by how quickly you submit your completed application and how quickly your medical records are obtained, among other things.

To obtain a new life insurance policy with the premiums financed, typically takes between three and six months.

For more details about the timing of the Bentley Life Settlement process, refer to our Process and Timeline.

14. How does Bentley Life Settlements work with my financial advisor?: Bentley Life Settlements can work directly with you, the policyholder, or with your financial advisor to create the optimum life settlement scenario for your particular estate planning needs.

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