Case Studies - Long Term Care Fund

The sales price of a life insurance policy will vary depending on the institutional buyer, health history and other variables that may be present at the time of sale.

Case Examples : Long Term Care Fund

	Before Settlement	After Settlement
Death Benefit	$1,000,000	$1,000,000
Premium	$40,000	$38,000
Surrender Value	$60,000	$0
Policy Age	5 years old	new
Cash to Client		$200,000

Female age 83, with reasonable health history.
Her concern for funding a long term care stay was in conflict with her desire to provide a death benefit for their heirs.
She was contemplating surrendering her policy.

Benefits from Life Settlement
The Life Settlement option was the only viable alternative in this case. Rather than accepting the $60,000 surrender value mandated by the insurance company, she was able to capitalize on the $200,000 current market value of her policy.

Since the sale price did not exceed her cost basis, the $200,000 was tax free. The client was able to establish a $200,000 long term care fund while maintaining the death benefit for her heirs.

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