From Thomson-Reuters and the Pinnacle CPA Advisory Group —
Besides providing loved ones with a source of funds for income replacement in the event of an untimely death of the family’s breadwinner(s), people buy life insurance for a variety of reasons.
For example, sometimes the purchase of a life insurance policy may be used to
- Fund a buy-sell agreement for a business
- Satisfy a lender’s requirement when a loan was made, or
- Fund anticipated estate taxes.
Whether it was one of these needs or something else, circumstances change and sometimes people find that they no longer need, or perhaps can no longer afford, policies that were taken out several years ago.
If this describes your situation, before you allow a term life policy to lapse (or turn in a whole or universal life policy for its cash surrender value), we recommend that you consider whether it might be more beneficial to sell the policy.
Known in the industry as a life settlement, selling a policy can sometimes net the policyholder a sufficient sum that’s far in excess of a life policy’s cash surrender value, or a term policy’s unearned premium. You can find out more about life settlements, the terms used and regulations involved at wikipedia.org.
If you have an unneeded policy, we’d be glad to talk to you about whether it might make sense to enter into a life settlement.
Please call us if you would like to set up an appointment to come to our office to discuss this.
Contact Pinnacle CPA Advisory Group
Contact the experts at Pinnacle CPA Advisory Group if you need have an interest in life settlements, or need help with any other individual or business tax or accounting issue. Call us at (614) 942-1990, drop an email to us at info@cpaagi.com, or simply fill out the Contact form on this site at cpaagi.com/contact.