A life insurance policy will allow an annuitant to sell life contingent annuity payments for a large lump sum of cash.
Sell Life Contingent Annuity Payments: Do You Need Life Insurance?
We hear many people ask: “I want to sell life contingent annuity payments, but some companies tell me they must buy life insurance while others say they can buy my payments without life insurance. Who’s telling the truth, and why is there a difference?
Sell Life Contingent Annuity Payments with Life Insurance or Self-Insurance
The phrase “life contingent” means that your annuity payments will stop when you die. In order for us to buy these payments there are two options. Corona Capital can help you obtain a life insurance policy to cover the annuity payments you sell in case you pass away, or we can Self-insure your payments by simply giving you less money at a higher discount rate.
Which is Better?
Each person’s life contingent annuity payments and circumstances are different. The experts at Corona Capital will customize a transaction that suits your situation. Generally, you’ll receive more money and a better exchange by getting a life insurance policy. Here are some things to know:
Using a life insurance policy allows us to offer a lower discount rate to sell life contingent annuity payments, which equals more money for you.
Having a life insurance policy may allow you to choose a beneficiary (children, relatives, spouse). Any excess insurance may be paid to the beneficiary you choose.
On some smaller cases for healthy individuals, we can often obtain life insurance without requiring a medical exam. For larger or special cases a medical exam will be necessary.
Pros & Cons
Best Rate/More Money
Court Approval Required
Medical Exam Required
Sell Far Away Payments
With Life Insurance
Without Life Insurance
Doesn’t Life Insurance Cost Money? Wouldn’t I Receive More Money without It?
Yes there is a cost to it, but having life insurance increases the value of your life contingent annuity payments. We build everything into your transaction including attorney and court costs. You’ll always know what you’re receiving in the end. Life insurance isn’t free, but will almost always cost less than what you’d lose by trying to sell life contingent annuity payments without it. Here’s an example:
Jeremy is 40 years old and has monthly life contingent annuity payments of $1,000 starting July 2024. He plans to sell 10 years (120 months) of his annuity payments.
Jeremy's Transaction with Life Insurance
Present value of payments at 13%
Net discount rate
Jeremy's Transaction without Life Insurance
Present value of payments at 19%
Net discount rate
This is only an example. The value and rates will be different for each case, but you can clearly see that Jeremy can receive over $11,000 more with insurance than he would if he tried to sell life contingent annuity payments without it.
Why Do Some Companies Only Want to Buy My Annuity Payments without Life Insurance?
Some may encourage you to sell life contingent annuity payments without insurance. Their reasons can include any or all of the following:
Some companies are limited in how they fund your transaction because they only resell the payments to specific investment funds which aren’t flexible.
Many companies don’t have a properly trained sales team to structure life contingent annuity transactions. They’ll often quote all annuity payments at the same high rate.
Very few companies have relationships with life insurance companies that can offer the right coverage for those trying to sell life contingent annuity payments.
Corona Capital maintains a diverse network of funding sources. This gives us several options to give you the most money for life contingent annuity payments. We actively manage exclusive relationships with life insurance companies which provide us with the best pricing. That means we can pass on the favor to you in the form of more money for life contingent annuity payments!
Am I Better Off to Sell Life Contingent Annuity Payments without Insurance?
If you want to sell life contingent annuity payments that are paying out right now or start up in the next few years then the difference in value may not be as significant to sell annuity payments without life insurance. Each case is different. Some people are willing to accept less money in favor of an easier process. Other people may have unique situations which don’t qualify for standard life insurance.
Will I Need to Take a Medical Exam?
With Life Insurance:
Usually, yes. However, in some smaller cases for healthy people, life insurance can be issued without taking a medical exam. When life insurance is offered without an exam, it’s called Simplified Issue. There will be a detailed phone interview, and the life insurance company will access your medical records to verify the information you give in your interview. If an exam is required, we use friendly examiners who will work around your schedule.
Without Life Insurance:
It varies. In order to sell life contingent annuity payments without insurance, it’s usually necessary to have an organization perform a “life expectancy report” on you. Sometimes a medical exam will be needed. Whether the exam is required will often depend on your age and medical history.
What if I Don’t Qualify for Life Insurance?
Learn more about the life insurance process to sell life contingent annuity payments. Corona Capital has been able to get life insurance coverage for people afflicted with Cerebral Palsy, Paraplegia, Quadriplegia and Lead Poisoning. We’ve also insured others who live outside the United States. If it’s possible, then we’ll find a way. If your circumstances or health make it not possible, then we may be able to self-insure the transaction.
If you want to sell life contingent annuity payments from a structured settlement, then the team at Corona Capital is ready to give you the best possible transaction! Receive a free analysis to sell life contingent annuity payments or call us at +1 (302) 317-1611.
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