• Life Settlements

  • Life Settlements – Outside the Box

    Mott Tax Advisory Services is at the forefront of the rapidly growing and dynamic life settlement market. We oversee a wide range of complex processes, manage administrative details and ensure regulatory compliance. We use our capital markets experience to achieve the highest offers for policies from institutional funds for our clients. We are committed to full disclosure, personalized service and professional best practices in everything we do.
    Developing a comprehensive Financial Memorandum to ensure our client's case receives the highest priority among investors;
    Auctioning and negotiating for the highest offer based on our knowledge and expertise in the life settlement marketplace;
    Closing specialist to complete the process efficiently and effectively.
    At Mott Tax Advisory Services, we work hard to obtain an offer that meets or exceeds our clients' expectations. However, policyholders have no obligation to accept a life settlement offer, and there is typically a rescission period should they decide not to pursue it.

    Our Commitment to Compliance and Full Disclosure

    Mott Tax Advisory Services has a model compliance and best practices program. We promote the principles of transparency, professional standards and improved industry relationships. We are broadly licensed and a member of the Life Insurance Settlement Association (LISA), and we carefully monitor changes in the industry.
    Above all, Mott Tax Advisory Services is dedicated to protecting the interest of each party involved in a transaction. Our financial interests and goals are always aligned with your goals. And we are committed to full disclosure, providing details of the auction and final transaction, including the amount of all offers.

    Life Settlement Brokerage

    A life settlement is made possible by a large secondary market in which licensed accredited financial institutions purchase life insurance policies for their investment portfolios. Qualified individuals receive a lump sum payout for their unwanted policies that can be significantly greater than the cash surrender value. In fact, a recent Wharton Business School study found that life insurance policies sold for an average of 3.6 times their cash surrender value in the secondary market.
    In a life settlement transaction, the financial institution assumes responsibility for payment of the premiums and becomes the policy's beneficiary. The proceeds from a life settlement are unrestricted and can be used by clients as they desire – personal, family or philanthropy.

    Product Innovation

    Mott Tax Advisory Services responds to clients' needs with innovation and flexibility. For example, we can tailor a program that allows your client to retain a lesser amount of coverage and surrender a portion of the policy to meet financial planning requirements. And we can offer sophisticated insurance products to seniors who may have sold or surrendered their old policy.

    The Best Possible Offer for our Client

    The amount of a life settlement is based primarily on the insured's age, health and future required premiums. The type of policy, rating of the carrier, face value, outstanding loans and cash value also come into play. Finally, the payout amount is affected by the market offer that our client receives. This can vary significantly. Mott Tax Advisory Services capital markets department has more than 30 years of experience

    Life Settlement Case Examples*

  • Tax Implications

    When considering a life settlement, clients should consult their tax advisors about their own tax status. In general, the proceeds from a life settlement are tax-free up to the cost basis of the original policy. The difference between the policy's stated cash surrender value and the original cost basis is taxed as ordinary income, and anything above the cash surrender value is taxed as capital gains.

    Experienced, Effective, Easy to Do Business With

    A life settlement program is simple in concept but implementation is complex. Successful outcomes depend on the daily management of professionals from the medical, insurance, legal and investment community and a high level of administrative follow-up. They require the ability to access and negotiate with large financial institutions that provide life.