If you are a male age 65 or older and you have a term policy with at least 3 years left on the level period, you may be able to settle the policy. When I say settle the policy you may be able to sell the policy to investors who will pay you a percentage of the face amount. This may be a great option for a lot of people as most term policies never get collected on by the beneficiaries. On top of that, when the premiums go up astronomically at the end of the level period, most clients drop those policies.

The face amount to qualify for this program needs to fall in the 1 million to 5 million dollar range. The typical offer is 3 to 7 percent of the face amount. The offer is determined by the age of the policyholder and other factors. For example, a 5% offer on a 5 million dollar level term with 4 years left on it, would be $250,000. This can be pretty attractive and can even be used to buy a new policy in some instances. While the term policy may have been used initially for income replacement, the insurance need might be for estate planning now. For more information on this program, you can contact Vince at Vince@paramountlifeinsurance.com and to see if you are eligible.

There are some very important things to look at when you are creating your estate plan.

1.  It is important to figure out the necessary liquidity that your beneficiaries will need upon death.  This is something that is often not considered because a person thinks they have enough assets to cover their loved ones.   This may be the case, but the assets may not be in cash and require a liquidation of the assets.  The need for liquidity may require an immediate sale of the asset and command a lower number than the value of the asset.   The other way to get liquidity could be taking a loan to cover the necessary expenses to settle the estate.  This is not a great option as it will create debt for your loved ones.   Life insurance can be a very good tool to create immediate liquidity to the estate.

2.  Will you be subject to Estate Taxes and what is your maximum exemption?  Will the government come in and tax up to 50 % of your non-exempt estate when you pass away?

3.  Have you created a trust?  Should your trust be irrevocable or revocable?  How is it structured and what type of trust is it?

4.  Does all of your beneficiary information match up on all of your assets with the beneficiary information with your trust?  If not, the beneficiaries on the assets will supercede the trust designations.  Make sure all of this matches up.

When you are creating your estate plan, make sure to consult with your tax, financial, and estate planning attorney.   You should make sure you review it every few years and make sure nothing has changed, etc.

What happens to life insurance proceeds if nobody claims them?

Did you know that between 25-50% of all life insurance policies go unclaimed by the beneficiaries?

It is very common for an insured to pass along and for their family to be unaware that they have life insurance.   This happens in many cases because the insured doesn’t tell them about the policy or where the policy information is.  If you were unaware of a policy in existence, it may not occur to you to look for it.  If you are not sure whether someone had a life policy, you probably should try and sort through their papers, check bank stubs, bank statements, safe deposit boxes, etc..  The life insurance company will not try and track the beneficiary down, so it is up to the beneficiary to come forward and claim the money.  If it is not claimed then the insurance company will send the money to the state of the insured.  The proceeds will be held in a trust account, waiting to be claimed.

There is really no master record of life insurance policies out there, so it is easy for someone to pass without a beneficiary knowing.   It is important to keep your loved ones informed of what you have and where the documentation is.  After you have invested the time and money to get the policy, you want the proceeds to go to the person you left it for.  Also, make sure to check to see if the deceased had any life benefits at their place of employment.