Case Studies

"Because of the financial impact, financial advisors have a duty to educate policyholders about the settlement option..."

On Wall Street
November 2002

Case Study #1

A 78-year-old male, held three universal life policies totaling $1.2 million and the total premiums he paid on the three policies totaled $34,960. The client wanted to reduce his annual premiums while maintaining similar coverage. The client used the $400,000 settlement offer to purchase a new $1 million single-premium universal life policy. The client saved $34,960 per year in annual premiums, but still maintained the coverage he needed.

Case Study #2

A husband and a wife, ages 76 and 71 respectively, were paying $93,000 a year for a $4 million survivor life policy with $204,000 cash value. The husband wanted to lower his premiums and maintain coverage, so he used the $1,000,000 settlement offer to purchase a new $4 million single premium survivor life policy for $713,000. He not only eliminated his $93,000 annual premium but received $287,000 in cash, more than the cash value of his existing policy.