When looking for financial assistance for terminal illness, especially when facing a serious diagnosis, more and more people are learning that their life insurance policy can be considered a valuable asset to utilize for much needed funds.
There are dozens of companies that offer the opportunity to sell your life insurance policy outright in a transaction called a “life settlement” or “viatical sale”. The company offering to buy your policy will analyze your medical and insurance records, consider your premium payments, and make an offer to purchase the policy for a smaller percentage of the death benefit. You’ll receive a one-time payment in exchange for transferring ownership of the policy over to the new company, giving them full rights to the entire death benefit upon your passing.
But there are other options to consider. Don’t sell your life insurance policy without talking to Fifth Season Financial first!
With Fifth Season’s FLAG (Funds for Living And Giving) program, you don’t sell your policy. Instead, Fifth Season advances you money against the face value of your policy, while retaining value in the policy to ultimately pass on to your beneficiaries. The FLAG advance is not repaid during your lifetime like a typical loan; instead, all costs (repayment, interest and fees) are paid later out of the death benefit. All funds remaining after repayment and fees are passed on to your beneficiaries. Funds for Living And Giving is what makes our program so unique and impactful for those who qualify.
Five Important Benefits Of A FLAG Advance Over A Life Insurance Policy Sale (Viatical Sale/Settlement):
Unlike a life settlement (which only provides financial assistance one time), the FLAG program typically provides two payments – one to you now, and one to your loved ones later. In more than 90% of Fifth Season’s advances to date, funds have remained to pass on to the individuals you’ve deemed important to provide for.
TOTAL BENEFIT / PAYOUT
The total financial benefit of a FLAG advance can often far exceed that of a policy sale. While the single payment of a life settlement often represents a small fraction of a policy’s total benefit, Fifth Season’s two payments (one to you now, one to your beneficiaries later) combined have, on average since 2007, exceeded 82% of the face value of policies utilized with FLAG. Performance varies by an individual’s lifespan and policy details, but a FLAG advance can often provide a much larger payout to you and your loved ones.
The money you receive from the sale of a life insurance policy is usually taxable as either ordinary income or capital gains (or both). With a FLAG advance, funds are generally not taxable as either income or capital gains. Make sure to check with a financial advisor to see the tax implications of any transaction.
Although you may only be speaking with your life insurance agent about a life settlement, the sale process can involve dozens of other contacts, including multiple life settlement providers and brokers that may sell the policy several times over your lifetime. With Fifth Season’s FLAG program, only our small group of staff and medical underwriters will have access to your personal information, and only Fifth Season will be servicing the account. Your privacy will be well protected.
Once you sell your policy in a life settlement, the transaction is complete; you can’t “undo” a sale if your needs or medical status changes. With a FLAG advance, you can repay your advance balance at any time to restore the full value of your death benefit! And if your medical status changes, you may have the opportunity to get additional funds to help meet your immediate needs.
How To Get Financial Assistance For A Serious Illness
With any transaction that involves your life insurance and financial assistance, make sure to consider all of the options that may be available to you. The team here at Fifth Season Financial is happy to help you learn more about the various options available to you, and how to qualify for a FLAG advance. Call us today at 866-459-1271, or learn more at fifthseasonfinancial.com.
How Does Funds for Living and Giving (FLAG) Work?
Providing Financial Assistance
to Individuals with Advanced-Stage Illness