The Life Settlement Calculator – How Life Settlement Calculations Work “Under The Hood”

If you’ve ever used an online tool to calculate an estimate of value for a life insurance policy you want to sell, you may have wondered about the various factors that are considered in these kinds of transactions. This article may help you decide whether selling your life insurance policy (known as a life settlement or viatical settlement) is a good fit for you or your loved ones.

  • If your policy is too expensive to continue paying the premiums and you are considering giving up the policy, you should see if it has value to a life settlement provider or a life settlement broker.
  • If you don’t need your policy for the reason you first got it, you should see if a life settlement provider or life insurance broker can convert that policy into money you can use for your current needs or wants.
  • If you need money for immediate needs then selling your life insurance policy for the fair market value might be a good source of those funds. A life settlement provider can determine the value of your policy.
  • If you want to fund a long term care plan, the sale of a life insurance policy can be used. Some life settlement providers or life settlement brokers can assist with this. This is a specialty of Q Life Settlements.

What Calculation Is Used By A Life Settlement Calculator To Value My Policy?

The value of your policy will be based on several items.

  1. How old are you? The older you are, the more value there is in your policy.
  2. Are you male or female? Since women typically live longer than men, policies on males are valued higher due to the shorter life expectancy.
  3. Is your health, compared to others of similar age, excellent, very good, average or poor? The value of your life insurance policy depends, in part, on a professional estimate of your life expectancy. Your health helps determine the result of that evaluation.
  4. How large is your policy? The larger the policy (death benefit), the more valuable the policy all else being equal.
  5. What type of policy do you have? The most valuable policies are universal (flexible premium) life insurance policies. Other policy types, including whole life insurance and term life insurance, can also have value and we are happy to value those types as well.
  6. Who is the insurance company? Policies issued by insurance companies with the highest quality ratings have the highest values. Because of the generally high quality of the United States life insurance companies, policies from almost all US life insurance companies can be valued.
  7. Is the insured a US citizen? Is the owner a US citizen or company? At this time, we can only work with life insurance policies on US citizens and from US citizens or companies.
  8. Does your policy have cash value? The value of a life insurance policy is primarily based on the death benefit (face value) of the policy rather than the cash value. If your policy has little or no cash value, it still may be very valuable.
  9. What premiums must be paid to keep your life insurance policy in-force (still effective)? The lower the premiums which must be paid in future years, the more valuable your policy is.
  10. Does your policy have a loan against it? Policies with policy loans can also be purchased, but the amount you would get paid would be offset by the loan amount.
  11. Do you only want to sell part of your policy? We can help you achieve this objective as well, and we will value only the portion that you want to sell.

How do you get a quote on your life insurance policy?

We make it a simple process.

  1. If you go to the life settlement calculator on our homepage, you can get an estimate of the value of your life insurance policy.
  2. If you fill out our simple application, we will more precisely value your policy as soon as we get details from your doctors and your insurance company, both only with your permission. You will not need to do anything at all while we are doing our work and everything we do is free and at no cost to you.

As soon as we have the information necessary to value your policy, we will call you with any offers that are made for your policy. You can then decide if selling the life insurance policy is the right thing for you and your family.

Who Should You Allow To Buy Your Policy?

Make sure your life insurance provider or life insurance broker is licensed in the state of the owner of the policy. You can check with your state’s Department of Insurance, Department of Financial Services, or equivalent state agency whether the life settlement provider and/or life settlement broker are licensed. For example, in Florida, the regulator for viatical and life settlements is the Florida Department of Financial Services.

Your life settlement provider and life settlement broker should be a  member of the Life Insurance Settlement Association. LISA is the primary trade organization for those working in the life settlement industry in the US, and members must abide by a Code of Ethics and Standards of Professional Conduct.