Page 11 - The Lifeline Program White Paper

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C O N T I N U E D
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may be holding it with the intention of letting it
lapse. It was purchased for a specific time frame,
and they realize that the safety net is no longer
needed once the term expires. What they don’t
know is that the option exists to do a
term-to-perm transaction. It frequently makes
more sense than letting the policy lapse.
If an insured person has more than one term
policy, it may be advisable to have them convert
one policy for a settlement while keeping the
other term policy to ensure long-term
insurability and beneficiary protection.
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WHAT QUALIFIES FOR TERM-TO-PERM?
Policy must be convertible term with a minimum
face value of $500,000
Policyholder is more than 70 years of age
Policy must be within the conversion period
determined by the carrier
ADVANTAGES
Underwriting from existing policy carries over to
new, converted policy
Cost of conversion is built into life se lement, so
no out of pocket costs exist for policyholder
“Found money”
DISADVANTAGES
A life se lement can reduce overall insurability
Proceeds may be taxable
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