The life settlement option represents a unique opportunity for businesses, regardless of their size. Companies which obtained a “key man” policy on an executive, manager, or employee, or perhaps a “buy/sell” arrangement that was structured on behalf of ownership, may want to evaluate this opportunity.

As these policies are generally term policies, companies often will allow them to lapse, once they have “done their job.” Once you understand the unique concept of life settlements, you also understand why this may be a potentially costly error. As these policies are often convertible to universal life policies, the business can create significant liquidity from an otherwise dormant asset; hence they present a real, yet often unknown value to business.

Businesses should discuss with their advisors whether the policies they own and no longer require can turn into revenue for their firms. Imagine the contrast of lapsing a life insurance policy vs. generating perhaps hundreds of thousands of dollars or even more, from an asset that would never have been worth anything at all.

There are many reasons why a business would consider selling a life insurance policy. Common reasons include:

Premiums are no longer affordable

• Key-man insurance is no longer needed after retirement or changes in corporate structure
• The business wishes to fund a deferred compensation or severance package
• The business has been sold, liquidated or is up for sale
• The business wishes to acquire another company
• The buy/sell agreement is no longer needed due to the sale of the business or the departure of one of the parties to the agreement
• Liquidity is needed to retire a debt, buy out a partner’s interest, or for other reasons

Whatever the reason, Brookwood Settlements will utilize its considerable resources and deep knowledge of the life settlement industry to help businesses realize the full market value of their policies.