Life Settlements

Taxation of Life Settlement Payments

The lack of common knowledge about life settlements places seniors in a situation where they do not have the facts necessary to adequately weigh their financial options. This difficulty is laid bare when considering that fewer than half of life insurance policyholders are even aware that selling their policy is an option.

However, investment agents and financial advisors are increasingly devoted to cultivating greater client awareness about life settlements, so that trend should improve. Those parties have a fiduciary duty to properly advise policyholders about the potential gains and drawbacks of a transaction in the life settlement market, and a recent decision by the IRS might play heavily into that equation.

To learn more about life settlements and the various rules and regulations that govern them, contact the life settlement professionals of Life Settlements and You. Call us today at 619-489-5556 to take control of your financial future.

A Positive Outcome

The Internal Revenue Service strikes fear into the heart of millions of workers and businesses because it has a tremendous amount of power and influence. But the announcement of its plan to consider life settlement payments as capital gains rather than straight income should give seniors some cause for appreciation.

This will often mean that there is a lesser tax liability, and since the aim of most life settlement sales is to gain access to financial resources that are necessary for basic life expenses, long-term medical care, and other significant monetary needs, every dollar matters. Consider the following statistics:

• It is estimated that 80 % of people aged 62 or older hold life insurance policies
• Approximately 45 % of seniors do not know that policies can be sold
• The funds generated by a life settlement are often close to 20 % of the face value

Contact Us

If you are considering a life settlement, or simply wanting to learn more, we can help. Contact the life settlement team of Life Settlements and You at 619-489-5556.