FAQs
Your guide to navigating the Life Settlement seas
- What is a life settlement?
- Why do senior citizens sell their life insurance policies?
- Is it legal to sell your life insurance policies?
- How much money will I get for my policy?
- After I sell my policy, are there restrictions on what I do with the money?
- I trust my current financial advisor and do not want to bypass him/her, can we all work together on this transaction?
- What types of life insurance policies can be sold?
- How do I know if my policy qualifies under GWG Life Settlement’s model?
- Are there any application costs or medical exams?
- Is the process confidential?
- How long does it take to sell an insurance policy?
- What happens to the policy after I sell it?
- What is your continued involvement after the policy is sold?
- What if I’m not old enough to qualify for a life settlement with GWG but have a shortened life expectancy due to illness?
What is a life settlement?
Generally, a life settlement is the sale of a life insurance policy insuring the life of a senior citizen, in return for a lump sum of cash.
Why do senior citizens sell their life insurance policies?
The reasons are many:
- The policy is no longer needed or wanted
- To pay for the rising cost of long-term healthcare
- The premiums become unaffordable
- There is a change of beneficiary due to death or divorce
- To receive more money than the cash surrender value
- There is a forced liquidation due to financial hardship or bankruptcy
- There is a change in estate planning needs
- The desire to live later years more comfortably is one of the many good reasons to consider a life settlement.
Is it legal to sell your life insurance policies?
Yes. The sale of a life insurance policy is regulated by most states and requires the involvement of a licensed broker, life agent, lawyer, CPA or other qualified professional to advise the seller. A representative of a seller of life insurance policies is legally obligated to find the highest possible selling price for the policy owner, similar to a real estate agent selling a home.
How much money will I get for my policy?
It depends on a number of factors such as:
- Your estimated life expectancy
- Your age
- Your medical condition
- Type of insurance policy
- Insurance company rating
- Annual premium payments
After I sell my policy, are there restrictions on what I do with the money?
No. Regardless of why you decide to sell, the money is yours to spend, as you like.
I trust my current financial advisor and do not want to bypass him/her, can we all work together on this transaction?
Yes, GWG will work with your financial advisor, attorney, or other professional to ensure you are completely comfortable throughout the transaction.
Are the proceeds from a life settlement taxable?
The proceeds are generally tax-free up to the amount of premiums that have been paid from when the policy was first issued, but past financial transactions involving the policy may affect taxability of sale proceeds. We recommend that you consult your tax advisor as GWG is not licensed to provide tax advice.
What types of life insurance policies can be sold?
Most all policies qualify with some modifications. The most common types of life insurance policies include but are not limited to:
- Universal Life
- Term Life
- Variable Life
How do I know if my policy qualifies under GWG’s model?
Most types of policies qualify if:
- You are 65 years of age or older*
- Your life insurance policy is $350,000 or more in face value
- You have had the policy for at least two years
For further qualifications, see our Pricing Guidleines
Are there any application costs or medical exams?
No. There are no application costs or medical exams required.
Is the process confidential?
Yes. All medical, financial and other personal information obtained during the course of the transaction is treated with the utmost confidentiality and will not be disclosed to any unauthorized party.
How long does it take to sell an insurance policy?
Assuming all parties are well-organized and have submitted a completed application in a timely manner, the transaction will take approximately 6 to 10 weeks to finalize, from beginning to end.
In order to expedite the settlement process, all documentation must be completed by the time of case submission. Following submission, the transaction will take approximately 6 to 10 weeks, from beginning to end.
What happens to the policy after I sell it?
All rights and obligations of the policy are transferred to the GWG DLP Master Trust. You will no longer be responsible for paying the policy’s premiums.
What is your continued involvement after the policy is sold?
GWG will maintain routine communication with you or someone you designate to keep updated as to your residence address. You may be required to provide additional information and execute subsequent forms as needed by GWG to maintain the policy for the remainder of your life. Routine communications will not occur more often than once per quarter unless your life expectancy is under 24 months when communications may occur monthly.
What if I’m not old enough to qualify for a life settlement with GWG but have a shortened life expectancy due to illness?
GWG purchases policies only if the insured is age 65 or older and has a life expectancy of 36 to 168 months.
If you think you might qualify for a life settlement, please complete the pre-qualification form for a free appraisal or you may call us at 877-746-1944.
