We have many business owner clients who have purchased key person life insurance policies for their executive team over the years.  These policies protect the business and their key assets, their team.  However, many do not consider the full breadth of options later on.  Specifically, there can be a secondary market for these policies when they are no longer needed by the business.  Having the ability to monetize these policies, rather than let the policy lapse or surrender it for a lesser amount, has been a creative way for the business to recoup the dollars spent and realize untapped dollars. Below is a recent scenario that we successfully assisted a client with:

Mrs. T is a business owner with $1 million key person term life insurance policies held on her business’ executive team. When her COO decided to retire at 68, she was going to stop paying premiums on the term policy and let it lapse. After visiting with us, we took the term policy out to the secondary market to explore outside demand. She was offered over $200,000 for the policy by a well-known settlement company that purchased the term policy and converted it to a permanent policy for their long-term portfolio

 

 

Insurance services provided by Synergy Risk Management, LTD.