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HOW ESCROW MINIMIZES RISK IN VIATICAL AND LIFE SETTLEMENTS
Escrow is a mechanism where funds are held by a neutral third party until specific conditions outlined in a contract are fulfilled. In the context of viatical or life settlements, when a lump sum is paid to the insured, these funds are placed in escrow until the transfer of ownership and change in beneficiary are officially recorded by the life insurance carrier.
The purpose of utilizing escrow in viatical and life settlements is to ensure a secure and transparent process for all parties involved. By entrusting the funds to an independent escrow agent, the risk of misappropriation or mishandling of funds is minimized. This arrangement provides a level of protection and builds trust among the participants.
During the escrow period, the third-party escrow agent holds the funds in a designated account, separate from the accounts of the involved parties. The funds remain in escrow until the necessary documentation is completed and verified by the life insurance carrier. Once the transfer of ownership and change in beneficiary are officially recorded, the funds are released to the appropriate parties as stipulated in the settlement agreement.
Escrow Protects Your Interests in Viatical and Life Settlements
Escrow plays a critical role in facilitating a smooth and secure transaction in viatical and life settlements. It helps ensure compliance with legal and contractual obligations, protecting the interests of both the seller (the insured) and the buyer (the viatical or life settlement provider). Additionally, it provides reassurance to all parties involved that the funds will be properly disbursed in accordance with the agreed-upon terms.
In summary, escrow serves as a protective measure in viatical and life settlements, where funds are held by a neutral third party until the transfer of ownership and change in beneficiary are confirmed by the life insurance carrier. This arrangement helps safeguard the funds and guarantees a transparent process, providing peace of mind for all parties involved in the transaction.
Selling Your Life Insurance Policy Is An Important Decision
How do you know if you will receive the best offer when you sell your life insurance policy? The only way to know for sure is to apply to every licensed buyer in your state, which could be 10–35 different companies. And those direct buyers do not have your best interests in mind, they represent their investors. At Welcome Funds, we've leveled the playing field for policy owners. We negotiate the best offer for you by conducting an auction with these buyers. When buyers complete, policy owners win! One application, multiple buyers—it's what we call...Life Settlements. Simplified.
Welcome Funds Represents You!
Founded in 2000, Welcome Funds is a nationally licensed life settlement broker that represents policy owners who want to sell their life insurance policy in the secondary market. Our institutional life insurance buyers compete in an auction bidding process to ensure that we secure the highest offer from the life settlement market. We've negotiated over 35,000 life settlement offers and provided more than $1 Billion in sales proceeds to our clients. Please review our website to learn more about how we can provide professional representation and expert advice on selling your life insurance policy.
- It's Absolutely FREE to Find Out if You or Your Loved One Is Eligible to Sell A Life Insurance Policy
- There's No Obligation at Any Time
- Our Life Settlement Qualification Process is Completely Confidential
- We Provide a FREE Personal Consultation and Appraisal
Complete our free Life Settlement Qualifier or call us toll-free at 877.227.4484 to speak with a client care advocate.
LIFE SETTLEMENT BLOG
Direct Life Settlement Buyers vs. Welcome Funds – Advisor Beware!
Posted: by John Welcom
Welcome Funds has the privilege of working with numerous financial advisors and wealth managers – and have done so for two decades – some who exclusively focus on servicing high net worth clients. One such advisor who is active in the life settlement market — and already understands the value he can create for his clients — had historically negotiated directly himself with two or three leading buyers of life insurance policies. He thought that simply engaging with mor...
How to Sell Your Life Insurance Policy for $4,743,000 Instead of $275,485?
Posted: by John Welcom
Mr. Williams purchased $10 Million in life insurance coverage in 2001 to provide his family with financial security. Over time, his financial priorities changed: his wife passed away, his children became financially independent, financial burdens arose and the estate tax exemption increased substantially.
Suitability of Life Settlements
Posted: by John Welcom
Traditionally, estate planning advisors counsel their high net worth clients to obtain life insurance policies with large death benefits. The strategy is simple: create a vehicle for heirs to receive tax-free income at the time of an insured’s passing so sufficient funds are available to pay large estate tax bills when assets are inherited.
What is the Most Suitable Exit Strategy for Life Insurance?
Posted: by John Welcom
All eyes in the life insurance agency and the financial advisory world have been on New York, where in the summer of 2019, the New York State Supreme Court paved the way for implementation of Insurance Regulation 187. This rule imposes a new standard for agents and brokers when issuing a recommendation to a client regarding an annuity or life insurance product.
How to Get the Highest Life Settlement Offer
Posted: by John Welcom
When you decide to sell a valuable personal asset, you usually want to obtain the highest purchase price for that property. It is sound business sense. However, how do you truly know when you have reached the point of accepting and securing the most desirable offer?
Understanding the Fair Market Value of a Life Insurance Policy
Posted: by John Welcom
When a professional advisor identifies a life insurance policy that a client no longer needs or wishes to maintain, he should ask, as standard protocol, whether that policy may have value in the secondary market. If so, the client may be able to sell the policy in a life settlement transaction, enabling him to receive a higher cash payout than he otherwise would obtain by lapsing or surrendering the policy back to the insurance company.
The Power of a Life Settlement Auction
Posted: by John Welcom
Professional advisors with clients who no longer need or wish to maintain a life insurance policy have options when exploring the secondary market. Many advisors prudently rely on a licensed life settlement broker to assist them in the sale of the policy and with all aspects of the transaction. However, there is still a large number of professionals persuaded to work directly with only one buyer, called a life settlement provider.
Rebuttals to the “Direct Buyer” Model for Life Settlements
Posted: by John Welcom
Most professional advisors who explore the potential sale of an unwanted life insurance policy on behalf of their clients will rely on the assistance of a licensed life settlement broker. Life settlement brokers represent the policy owner in the transaction and have a duty to act in their best interests. Most notably, the broker’s and client’s goal is aligned: to sell the policy for the highest price possible.
Carrier Resistance To Life Settlements: Clients Need To Know They Can Sell Their Policies
Posted: by John Welcom
Consumers who sell their life insurance policies in the life settlement market receive as much as seven times more money than they would have received by surrendering their policies back to the insurance companies. Seven times! However, an estimated 9 out of 10 policies are allowed to lapse before paying a claim, according to the Life Insurance...
The Danger of Trying to “Time the Market” for Life Settlements
Posted: by John Welcom
Most investors in the stock market understand the danger of “market timing” — trying to choose the right day to buy a stock when the price is low and sell it when the price is high.
