When considering a Life Settlement,  it is important to ask yourself one important question.

What’s the net payout from my settlement?

An important factor to consider during your settlement negotiations is what you’ll keep after taxes. A life settlement is the sale of an asset, a taxable event. Taxes are currently in discussion with regulators, but currently most individuals are following 3 different steps.

• You are not required to pay taxes on the premiums you’ve paid since you’ve owned the policy

• You owe ordinary income tax on the difference between premiums paid and the cas surrender value.

• You pay capital gains on the amount by which the payout exceeds the cash value — which is likely to be most of the settlement depending on how long you’ve owned the policy and how much premium has been put in.

Understanding the tax implications will better prepare you for the net amount you will receive from settlement.

If you have questions, please call the toll free help line at 1-888-823-7764