FAQs

Sterling Advantage
Serving seniors through
life insurance settlements...

- Frequently asked questions -

Why would I want to sell my policy?

Enjoy substantial cash today and live the remainder of your life without monetary concerns.

Reduction in estate size or a change in tax policy.

The premium payments are no longer affordable or policy is too expensive to retain, due to large loans against it.

Eliminate credit card debt or avoid bankruptcy.

A Key-Man policy is no longer necessary because of a change in ownership or retirement.

You may want to sell a policy to purchase a less expensive policy or a joint-life policy instead of the single life policy. You may want to put the funds toward long-term care insurance.

You may gift the policy to a charitable remainder trust and let them sell your policy. Instead of simply donating the policy, Sterling can get you an appraisal for the sale of the policy. Offers will be higher than the policy's cash surrender value and you, as the donor, may then have an opportunity to take a larger tax deduction on your Federal income tax return. Once the policy is given to the charity, they immediately sell it for the appraised amount in exchange for a lump sum of cash. This will provide you with income for life and the proceeds will ultimately go to the charity. Generally, your income is between 6-8% of the policy's settlement value.

To purchase additional securities, mutual funds, or annuities as long-term investments.

Pay off existing personal and family debts such as mortgage or car payments.

What are possible uses for the proceeds?

Take a "long dreamed about" vacation.

Pay off your home mortgage.

Purchase a second home.

Pay gift taxes generated from gifting other assets to children or grandchildren.

Invest for additional income.

Complement income from a Reverse Mortgage.

Fund long-term care insurance premiums.

Money received may be used for any purpose.

Why is Sterling Advantage better equipped to sell my policy than others?

Noble Trenham, our chairman, has 38 years of experience in the investment banking and financial services industry and maintains an extensive network of colleagues who are eager to evaluate your policy and actively compete for ownership.

Our considerable understanding of each institution's strict policy acquisition criteria has enabled us to develop a FREE, five-minute policy matching assessment, which can guide us to the specific institutional funders, or the private investors who seek your policy. We then get them actively competing against each other to get you the highest offer for your policy. After our policy analysis is completed, we can almost always place your policy with the funder who makes the best offer.

Each funder has strict policy criteria regarding risk, insurance company rating, premium costs, type of policy, age of policy, size of policy, cash value and loans against the policy. In addition, your client's age, life expectancy and present medical condition are among several other factors for consideration.

If your broker or settlement representative takes a shotgun approach and shops your policy to all of the funders, he'll likely ruin your chance to sell it. It costs each funder about $1,000 to perform their due diligence on your policy. If one or two funders reject your policy because it did not meet their stringent criteria (meaning it was brought to the wrong place), the policy becomes stigmatized. The funders are a resourceful and tight-knit group. When a funder finds out that your policy was already rejected once or twice, most won't risk a similar loss and will reject it, without even looking at it. Doesn't it make more sense to let us show your policy to the funders who really want it and not gamble on losing the sale?

If your policy isn't matched on the first or second showing to the right corresponding funder's criteria, you risk ruining your chances of selling it. Without proper matching, only about 1 in 10 policies will be sold.

If your broker or your settlement representative doesn't have this expertise, we invite you try our free service. You won't be disappointed. Our free, five-minute policy assessment is your formula for success. After this preliminary test, we can determine if we can sell your policy and to whom. If a policy doesn't fit anyone's criteria, we'll tell you immediately. You'll save yourself valuable time and effort. You'll avoid stigmatizing your policy. Then, in the future, when the policy does fit a company's corresponding criteria, you'll be a welcome client. You won't find our exclusive assessment service at any other company.

We can also group smaller, less desirable policies that the institutional funders won't purchase into large portfolios that private investors will purchase.

Most competing settlement companies advertised are only middlemen taking a percentage of the potential policy settlement. By working with Sterling Advantage you will be eliminating the middlemen and receive the maximum settlement price.

What type of policies qualify for your senior life settlement program?

We will purchase virtually any type of life insurance policy, including group, term, whole life, and universal life - from "B+" or better rated insurance carrier. After becoming the owner and beneficiary of the policy, our purchasing company will make all future premium payments.

Selling your Key-Man Life Insurance policy is a smart choice. Thousands of executives have done so already. Our purchasing companies are the largest in the nation and will be funding billions of dollars in Key-Man and Senior Settlement policies over the next five years.

Is there a charge for your senior life settlement service?

No. You will never pay a fee with Sterling Advantage. Our consultation and valuation process is a free service to our customers.

Is this process confidential?

Yes. We maintain strict confidentiality with all personal, medical and insurance information. We do not sell or share any information gathered for the purpose of this transaction. Our organization is built on integrity and committed to maintaining your trust.

Can I sell my policy if it has loans or liens against it?

Yes, but the loan obligation will have to be factored into the offer price.

What is the difference between a viatical settlement and a senior settlement?

A viatical settlement usually involves a life-threatening illness. The viator often sells his or her policy for cash to be used for immediate medical expenses.

A senior settlement involves seniors who are over 70 years old and likely have some moderate health challenges. By selling their policy, they turn an unproductive asset into cash that can immediately be used for whatever purpose they choose.

Will I be responsible for paying the premiums once I've sold my policy?

No. The third party investor receives the beneficiary rights and assumes the obligation to pay the premiums when you sell.

Is there a lot of forms to fill out?

No. The application process is fast and easy. We are here to save you time, energy and stress, not to create unnecessary work for you.

How will this cash settlement affect other payments I receive?

If you are receiving benefits from an asset-based program, such as state or federal assistance programs, your benefits may be affected. We recommend you check with your accountant.

How long does this settlement process take?

If the documentation is complete, you can expect your cash in 4-6 weeks from start to finish.

What size policies can I sell to Sterling Advantage?

Generally, we look for policies in the $200,000 to $5,000,000 and higher.

How quickly will I be paid once I agree to sell my policy?

All policy purchases are handled through a large escrow company and your funds are sent to you within 5 business days following the close of escrow.

Is it legal for me to sell my policy?

Yes. U.S. Supreme Court precedent has established that a life insurance policy is personal property and is freely transferable. Senior settlements are legal in every state.

What kind of counsel should I seek before deciding to sell my policy?

We recommend you consult your CPA, tax advisor or estate planner before making a decision to sell your policy.

What tax issues should I be aware of?

The tax treatment of senior settlements can be considered favorable. The total amount of premium payments if recovered would be treated as a nontaxable return of premium. The remainder of any cash surrender value would be treated as ordinary income. The rest of the settlement amount received is taxed as a capital gain.

We recommended that you discuss your individual tax consequences with a professional tax advisor. In general, the Taxpayer Relief Act of 1997, which lowered capital gains rates, makes the sale of a life insurance policy an even more tax-efficient transaction. In the majority of circumstances, only the interest earned on the principal is taxed as regular income. The amount for premiums paid is not taxed a second time. Capital gains are taxed on the difference between the total of premiums paid and the settlement price.

Can I sell just a portion of my policy?

Yes, a large life insurance policy can be divided and just a portion of it sold. The original beneficiary's name remains on the policy and the part of the death benefit not sold will be paid to him or her.

Please bookmark this page
so you can find your way back!