Life Settlements from CPG offer a unique way to grow your business and benefit your clients

Life Settlements may provide significant compensation from life policies that are no longer needed or wanted.

Who is eligible for this program?
Policies that insure the lives of individuals age 65 or older and carry a face value of at least $250,000 may qualify for senior settlements. In most cases, but not necessarily all, the insured will have experienced a decline in health since the inception of the policy. Most permanent life insurance such as universal life and whole life, as well as certain term policies, second to die, and variable life qualify for senior settlements.

How much money can someone expect to receive from the sale of a life insurance policy?
The percentage of the policy death benefit a person can expect is determined by:

• Estimated life expectancy and medical history of the insured
• The face amount and type of life insurance
• Cost of premiums necessary to keep the policy in force
• Cash value built up in the policy
• Credit and solvency ratings of the insurance company
• Prevailing interest rates
• Any loan taken against the policy

Why should someone consider selling a life insurance policy?
There are a number of good reasons for selling a life insurance policy. Some of the most common are:

• The insured has outlived family or beneficiaries
• Premium payments are no longer affordable
• The estate size has decreased or the Federal tax law has changed, reducing the insurance required to pay projected estate taxes
• A policy is owned by a corporation on an executive who is no longer with the organization
• Insurance was acquired to fund a buy-sell or stock redemption agreement, and the company/partnership has been sold or dissolved
• Business bankruptcy

How would someone use the proceeds from this side?
Proceeds may be used as the recipient sees fit. Common uses include:

• Purchase of additional securities, mutual funds, annuities, or other types of life insurance
• Payment for long-term care insurance or other asset protection tools
• Funding a charitable gift, charitable lead trust, charitable remainder trust, or gift annuity
• Payment of gift taxes
• Purchase of stock from business partner

Why choose CPG Life Settlement Services?
An extensive life insurance background and broad knowledge of the Life Settlement market combine to make CPG the company of choice for a growing number of agents and professional advisors. Agents and advisors need only introduce life settlements to select clients. Our years of experience enable us to mold transactions that maximize both the return to the insured as well its attractiveness to institutional funders.

Who pays future insurance premiums?
Once the settlement is made to policy owner, all future premiums on the policy are paid by the institutionally funded provider.

What are the tax implications of selling a life insurance policy?
It is wise for any one contemplating a sale to seek the advice of a financial advisor or tax consultant. Individual circumstances may vary so that all or part of the proceeds may be tax free, taxed as ordinary income, or, taxed as capital gains.

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Case Studies

Case I

Husband (74, stroke survivor, uninsurable)
Wife (70, heart valve problem, hysterectomy)

Couple has $1 million term policy on her life; a $4 million estate and two daughters. The $1 million term policy, on top of having escalating premiums, is not enough to cover estate taxes. If she dies first, the proceeds will go into the estate and cause even higher estate taxes.

We were able to purchase the policy, and from the proceeds, they were able to buy a $2 million 2nd-to-die policy (so their estate is covered) and put a little more money in their pockets.

Case II

$1.5 million policy on a businessman who is 74 years old. He has three children: his son owns 40% of the business; his daughters each own 20%; and another 20% held in trust. The business continues to increase $1 million in value each year. When the man dies, the estate taxes on the percentage of the business that his son does not own is going to be tremendous. The son is going to take the policy and sell it to Viaticus - he is going to use the proceeds to buy the remaining minority share in the business from his sisters today; so if his father dies, he will receive favorable tax treatment. And he is able to purchase the shares at a time when the cost is more manageable.

Case III

$5 million in key-man policies on the board of directors, of whom the average age is 73. The company is being bought out. They each have plenty of coverage on their own. They wanted to draw value from these policies prior to the buy-out, when the company will no longer maintain the policy.

Cash Value - approximately $250,000
By selling the policy, they will receive well over $1 million.

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