Frequently Asked Questions

A life settlement involves selling your life insurance policy to a third party for a cash payout that is more than the cash surrender value but less than the death benefit. This option is ideal for policyholders who no longer need or can afford their coverage, typically those over age 65 or who have experienced a change in health. Our team at Florida Life Settlement Advisors guides you through every step of the process.

A viatical settlement is similar to a life settlement but is specifically for policyholders who are terminally ill (certified by a physician as having a life expectancy of 24 months or less) or chronically ill within the meaning of IRC §7702B. It allows you to sell your policy for a lump sum of cash to cover medical expenses, living costs, or any other needs. Under IRC §101(g) (https://www.law.cornell.edu/uscode/text/26/101), proceeds for a terminally or chronically ill insured are generally received tax-free, subject to the statute's conditions. We always recommend consulting a tax professional for your specific situation.

Most universal life, whole life, and convertible term life insurance policies qualify for a life settlement, provided the policyholder is typically over age 65 or has experienced a change in health. The policy's face value, premium cost, and remaining coverage period also play a role in determining eligibility.

The life settlement process in Florida typically takes around 60 to 90 days, though the timeline varies depending on how quickly policy information and medical records are received. Working with a licensed life settlement advisor like Florida Life Settlement Advisors can help streamline the process, from appraisal to final payout.

For a standard life settlement (a seller who is not terminally or chronically ill), the proceeds are generally taxed in tiers per IRS Rev. Rul. 2020-05 (https://www.irs.gov/pub/irs-drop/rr-20-05.pdf): the portion up to your cost basis (generally premiums paid) is a tax-free return of basis; the portion from your basis up to the policy's cash surrender value is taxed as ordinary income; and any amount above the cash surrender value is taxed as long-term capital gain. By contrast, viatical settlement proceeds for an insured who is terminally ill (certified life expectancy of 24 months or less) or chronically ill under IRC §7702B are generally tax-free under IRC §101(g) (https://www.law.cornell.edu/uscode/text/26/101), subject to its conditions. We always recommend consulting a tax professional for personalized guidance.

A life settlement involves selling your policy when you no longer need or can afford it, typically after age 65. A viatical settlement applies when the insured is diagnosed with a terminal or chronic illness and needs immediate funds. Both provide a lump-sum cash payout higher than the policy's surrender value.

It's easy. Call us at (813) 212-2267 or fill out our short online form on the estimate page to get a free, no-obligation life settlement quote. We'll review your policy details, provide a transparent valuation, and explain your options clearly.