The minimum requirements to engage in a Life Settlement are as follows:
- Policy owner may be the insured, a corporation, charity, trust or related party (i.e. family member).
- Minimum face value must be at least $100,000.
- The carrier must be at least B+ rated.
- The policy must be at least two years old and out of the contestability period.
- Policy types that qualify are: universal life, survivorship, term, whole life, group, corporate owned policies (COLI), key man, and life policies held in irrevocable life insurance trusts.
- Usually, annual premiums should generally be less than 4.5% of the face value of the policy depending upon the insured’s life expectancy.
- Should be a U.S. resident.
- Should be age 65 or older.
- In most cases, there is a change in health since the policy was issued.
- Life expectancy of insured is usually between 3 and 20 years.
The health qualifications for a Life Settlement are achieved by looking at independent life expectancy reports based on the insured’s medical records. Estimations can vary due to differing opinions that can cause varying offers from many Life Settlement companies.