Page 13 - The Lifeline Program White Paper

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A 72-year old male with a $1 million, 20-year, convertible term policy was determining
his options. The term was about to end, and the policy would be worthless if he didn’t
renew or convert it. The annual premiums to renew increased dramatically – from
$5,900 per year to $59,000 per year, making renewing untenable. His agent suggested
converting the policy to permanent insurance and then performing a life se lement.
The agent created a cost illustration that listed the expenses associated with the policy
conversion, while the life se lement provider computed a potential se lement o er
(contingent on the conversion). The insured fronted the conversion premium and the
se lement company purchased the newly converted policy from the senior. A er the
initial premium was paid, the transaction ne ed the policyholder more than $42,000.
C A S E S T U D Y
A TERM-TO-PERM
CASE STUDY
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