• Policy Changes: You may be able to reduce or eliminate future premium payments by obtaining a paid-up policy, by reducing coverage, or through other options available from your life insurer.

  • Policy Loan: You may be able to obtain a loan from your life insurance company using the cash value of your policy as collateral. Loan proceeds may be used to pay premiums or for other purposes.

  • Third-Party Loan: You may be able to obtain a loan from another party to pay your premiums using the cash value or a portion of the death benefit as collateral.

The listed alternatives may or may not be available depending on your circumstances and the terms of your life insurance policy.

If you have a specific concern about your life insurance policy, contact your insurance company or agent:

(Insurer name)

(Customer service)

(Address)

(Toll free telephone number, if available)

(Telephone number)

You may also contact your financial advisor, or you may contact the Office of the Commissioner of Insurance at 1-800-236-8517 or 608-266-0103; Email: [e-mail].

Ins 2.18 Appendix II

WISCONSIN GUIDE TO UNDERSTANDING LIFE SETTLEMENTS

Keep this information with your insurance papers

Thinking about selling your life insurance policy? Life insurance is a critical part of a broader financial plan. If you are considering a sale of your life insurance you should consult with a licensed insurance or financial advisor, attorney or accountant to find an option best suited to your needs.

What is a life settlement? A life settlement is the sale of a life insurance policy to a third party for a cash amount that is greater than the cash surrender value or accelerated death benefit but less than the expected full death benefit under the policy. The third party becomes the new owner or beneficiary of the life insurance policy, is responsible for paying all future premiums, and collects the entire death benefit when the insured dies.

Questions to ask before you sell your life insurance policy:

  • Do I still need life insurance protection?

  • Have I discussed all my choices with a professional advisor?

  • If I sell my policy how much cash will I get?

  • If I sell my policy will I be able to get additional life insurance in the future?

  • Is my life insurance provided by an employer or other group policy? If so do I have the right to sell it?

  • If I sell my policy, who will be the legal owner? Will the policy be resold?

  • Who will have specific personal or medical information about me? How often can medical information be requested about me? Will I be required to permit others to contact my medical providers or family members concerning my medical information?

  • Is the broker or provider I plan to work with licensed to do life settlement business in Wisconsin?

  • What are the costs and fees?

If you sell your life insurance it is important to know:

  • You may have to pay income taxes on some or all of the settlement money you receive. Consult a tax professional.

  • Creditors may be able to make claims against the settlement money you receive.