Frequently Asked Questions

A life settlement, or senior settlement, as they are sometimes called, involves selling an existing life insurance policy to a third party – a person or entity other than the company that issued the policy – for more than the policy's cash surrender value, but less than the net death benefit.

Life settlements benefit senior citizens by offering a valuable option for an unneeded or unwanted life insurance policy over the alternative of surrendering it for the policy's cash surrender value (if any) or allowing it to lapse.

A life settlement may make sense for you if you no longer need or want your current policy, or if you no longer can afford the expense of paying insurance premiums and are willing to give up or replace coverage. Every individual should consider his or her own unique circumstances before selling a life insurance policy. You may have alternatives that make more sense than selling your policy, such as borrowing against the policy. You may also be eligible for accelerated death benefits, which allow an individual with a long-term, catastrophic or terminal illness to receive benefits from a life insurance policy while alive. Check with your insurance agent, financial professional, tax advisor or the company that issued your policy if you have any questions about these options.

No, once the policy is sold you are no longer responsible for any of the future premium payments.

The amount paid to a seller depends on several factors, for instance the medical condition of the insured, the amount of premium payments necessary to keep the policy in force and the cash surrender value of the policy.

• When you are 55 years of age or older
• When a policy is lapsing or being surrendered
• When there is no longer a need for the security that the policy provides
• Premiums have become unaffordable
• Funds are needed to pay for long-term care or health care costs
• Financial hardships are present
• When there is a need for new life insurance, annuities or long-term care
• When the insured has outlived his or her beneficiaries
• When there is an estate tax change
• When a charitable organization that owns a donated policy no longer can maintain premium payments
• When there is a change in the health status of the insured
• When there is a liquidation of assets due to bankruptcy
• When there is a retiring executive covered by a key-man policy

These are a few of the many reasons why many would consider a life settlement.

Consumer privacy is very important to the J.G. Wentworth family of companies. We have privacy, anti-fraud and security measures in place to safeguard your personal information. Please click here to see our privacy policy.

The following information is provided as general guidance. J.G. Wentworth does not provide tax advice, so please consult your tax advisor when considering a life settlements transaction.

In general, the proceeds of a life settlements transaction may be subject to federal and state taxes:

• Tax free up to the amount invested (your basis in the policy, which is typically the total dollar amount of premiums paid into the policy less any distributions)
• Taxed as ordinary income up to the cash surrender value
• Taxed as capital gains in excess of the cash surrender value

Most life insurance policies can be sold, including term life policies. Although term life policies do not have cash value, many can be converted and sold for cash. J.G. Wentworth purchases:

• Term life
• Universal life
• Whole life
• Survivorship
• Joint first to die
• Portable group life
• Key-man

While variable life can be purchased in a life settlement, J.G. Wentworth currently does not purchase this type of policy.

After a policy is sold, all benefits and obligations of the life insurance policy are transferred to the new owner. Sellers receive a lump sum payment and are no longer responsible for paying premiums. The purchaser on the other hand, owns the death benefit of the policy. The seller is free to use the proceeds however they wish. However, if the seller wants to purchase life insurance – say a different policy with different terms and benefits -- they may run up against so-called insurable limits, since the first policy remains outstanding on their life.

No. If you contacted J.G. Wentworth directly (as opposed to having an agent or broker contact us), there are no brokerage or transaction fees. If your agent or broker contacted us, we will disclose their compensation to the seller of the insurance policy.

No. Life insurance policies from older individuals with normal life expectancies are commonly purchased in this industry.

No. J.G. Wentworth Life Settlements does not charge application fees and typically bears all costs of purchasing your life insurance policy.

Receipt of proceeds from a life settlement may affect your eligibility for public assistance programs, such as Medicaid, AFDC, supplementary social security income, AIDS drug assistance programs and because this insurance will still be outstanding it may limit access to more insurance coverage by the insured. In addition, the settlement proceeds may be subject to claims of your creditors. Please consult with appropriate social services agencies if these circumstances apply to you.

The first step is to call J.G. Wentworth Life settlements, LLC or fill out the form on the left. Call (866) 493-7715 now to speak with a representative. The J.G. Wentworth family of companies has completed over 50,000 transactions guiding every client through an asset transfer process of one sort or another.

In general, J.G. Wentworth will consider any policy and in the past has worked with policies valued at as little as $50,000. Please call us today to further discuss your options.

No. While to date the majority of life settlements transactions have been completed by high net worth individuals, you don't have to be a millionaire to benefit from the secondary market for life insurance. J.G. Wentworth purchases policies of all sizes, even ones with a face value of as little as $50,000.