Question 1

What is a life settlement?

Accepted Answer

A life settlement is the legal sale of an existing life insurance policy to a third-party institutional buyer for a lump-sum cash payment. That payment is greater than the policy's cash surrender value but less than its death benefit. The buyer takes over all future premium payments and eventually collects the death benefit.

Question 2

Who qualifies for a life settlement?

Accepted Answer

Most candidates are age 65 or older with a life insurance policy of $100,000 or more in face (death benefit) value. Health changes since the policy was originally issued can increase your settlement value significantly. Both term and permanent policies — including whole life and universal life — can qualify.

Question 3

Is a life settlement legal?

Accepted Answer

Yes. Life settlements are legal and regulated in most U.S. states. Trust Life Settlements, LLC. is a fully licensed life settlement broker operating in compliance with all applicable state regulations.

Question 4

How is a life settlement different from a viatical settlement?

Accepted Answer

A viatical settlement specifically involves a terminally ill policyholder — typically someone with a life expectancy of 24 months or less. A life settlement is for policyholders who are not terminally ill but may be elderly or have experienced significant health changes. Different tax rules may apply to each.

Question 5

What can I do with the proceeds?

Accepted Answer

There are no restrictions on how you use the funds. Common uses include supplementing retirement income, covering long-term care or medical expenses, paying off debt, funding a grandchild's education, or simply enjoying a higher quality of life. The money is yours to use however you choose.

Question 6

How long does the life settlement process take?

Accepted Answer

On average, the process takes 2–3 months from your initial consultation to receiving your funds. The main variable is how quickly medical records are obtained. Once submitted, buyers typically respond with offers within 2–4 weeks. Closing and fund transfer take an additional 2–4 weeks after you accept an offer.

Question 7

What information will I need to provide?

Accepted Answer

To get started, we just need basic policy information — the carrier name, face value, policy type, and annual premium amount — along with the insured's age and a general health overview. If we move forward, we'll request a brief medical authorization form so institutional buyers can review health records to make competitive offers. We walk you through every step.

Question 8

Do I have to accept any offer?

Accepted Answer

Absolutely not. You are never obligated to accept any offer at any stage. We present all offers with our recommendation, but the final decision is entirely yours. You can decline all offers at any time — at no cost to you.

Question 9

What happens to my beneficiaries?

Accepted Answer

Once a policy is sold, the buyer becomes the new policy owner and beneficiary. The death benefit will no longer pass to your originally named beneficiaries. This is an important consideration and we encourage you to discuss it with your family and any financial or legal advisors before proceeding.

Question 10

When do I pay your fee?

Accepted Answer

Our flat fee is only due at closing — meaning only if you successfully sell your policy and accept an offer. The fee is paid directly from the settlement proceeds, so you never pay anything upfront or out of pocket. There is no application fee and no charge whatsoever if your policy does not sell.

Question 11

How is Trust Life Settlements' fee structure different from other brokers?

Accepted Answer

Many traditional life settlement brokers charge percentage-based fees that may equal approximately 20%–30% of settlement proceeds. On a large policy, that can mean tens of thousands of dollars. Trust Life Settlements charges a flat fee based on the settlement proceeds tier, which is almost always significantly lower than a percentage-based commission. You keep more of your money.

Question 12

Are there any other fees I should know about?

Accepted Answer

Our flat broker fee is the only fee we charge. It is transparent and known upfront, and always paid from the settlement proceeds at closing — never out of pocket. We fully disclose all costs in writing before you commit to anything.

Question 13

Are the proceeds from a life settlement taxable?

Accepted Answer

Life settlement proceeds may be subject to federal and state income taxes depending on your situation. Generally, the portion of proceeds up to the total premiums you paid (your cost basis) is tax-free. Amounts above your cost basis may be taxable as ordinary income or capital gains. We strongly recommend consulting a tax advisor before completing a transaction.

Question 14

Is my information kept confidential?

Accepted Answer

Yes — completely. Your personal information, health details, and policy data are shared only with vetted institutional buyers as part of the settlement process, and only with your explicit authorization. We never sell, rent, or disclose your information to third parties for any other purpose.

Question 15

Will my family or doctor be contacted without my permission?

Accepted Answer

No. We will not contact your physician, family members, or anyone else without your written authorization. You control who we communicate with at every stage of the process.

Question 16

Do I need to tell my insurance company I'm exploring a life settlement?

Accepted Answer

You are not required to notify your insurance carrier that you are exploring a life settlement. However, once a sale is completed, the policy ownership change must be recorded with the carrier as part of the standard closing process.

Life Settlement Questions: Fees, Eligibility and Process

About Life Settlements

The Process

Fees & Payment

Confidentiality & Privacy

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