What is a Retained Death Benefit?

A retained death benefit enables a policy owner to keep part of his or her life insurance death benefit when they sell a larger portion of the policy on the life settlement secondary market.  Once the insured person dies, the beneficiary will receive the retained percentage of the death benefit payout, while the life settlement investors receive the majority of the policy’s value.

Retained Death benefits are available for seniors and for people that are chronically or terminally ill. When a seller of life insurance policy retains a portion of the death, he or she is also no longer responsible for premium payments.  The life settlement company takes on the responsibility of paying all premiums.  Discussing your options with an insurance agent is often helpful if you have questions about your life insurance death benefit or possibly selling a portion of it for cash in a life settlement.

Life Settlement Options – Retained Death Benefit

A retained death benefit enables you to sell your policy by exchanging a portion of your death benefit for the future. You can also choose the beneficiary of your life insurance policy. Finding a life settlement company to purchase the other portion of your death benefits is critical if you are interested in these services. Working with an experienced life settlement professional makes it much easier to find an investor interested in your life insurance death benefit. These professionals can easily handle all logistics to ensure the process goes smoothly.

Getting an Estimate

A life settlement professional will need to look at the details of your existing policy, and other information, to estimate its value. Your life expectancy also influences the value of your retained death benefit. Discussing your needs with a life settlement professional can help you determine your best options.  Whether you want or need to sell your entire life insurance policy for a lump sum cash payment, or you can consider a retained death benefit, a policy appraisal should be performed.

Who Can Be the Beneficiary of a Retained Death Benefit?

A retained death benefit is a life settlement that enables a policyholder to choose a beneficiary. Once the retained death benefits offer is approved, the buyer will make full premium payments, as the policy owner doesn’t have to worry about making any more life insurance payments. The beneficiary will receive a specific percentage of the death benefit payout once the insured passes away.

The purchaser of the policy will also receive a portion of the life insurance policy. A retained death benefit allows the policy owner to keep part of the original value of the policy while not having to make any monthly payments. A retained death benefit is often a win-win situation for policy owners and investors, as a life settlement provider can handle all the details.

Are Life Insurance Death Benefits Subject to Taxes?

Most life insurance death benefits aren’t counted as taxable income. However, there can be some exceptions, such as if the death benefit goes to an estate or interest is earned while a life insurance company holds on to the death benefit. Discussing your situation with a tax advisor is recommended to make this process easier while avoiding any mistakes.

Additional Things to Consider

A policy owner can also receive a cash settlement while retaining a portion of the death benefit for the life insurance policy beneficiary. This cash settlement lowers the portion of the retained death benefit. Discussing your needs with a life settlement provider can help determine the best option for your situation.

How to Choose Your Best Options?

This can be accomplished by working with an experienced team like WeBuy75.com to ensure that you have all the best possible options.  A policy appraisal and medical interview will be performed to see if you are a good candidate for a retained benefit.

Closing Thoughts

Learning about your current policy value compared to its death benefits is important if you are considering this option. Discussing your needs with a professional is always essential in helping you understand your life insurance settlement options. Find out your options today with no cost or obligation by reaching out to our experienced team!