Case Details
Three years ago, the couple purchased $20 million of UL survivorship coverage for estate planning needs. Recently their estate needs changed, reducing their requirements to $10M. They considered a reduced paid-up policy from the carrier but were only offered $3.75 million. Their advisor then submitted the case for appraisal resulting in Coventry’s offer of $2 million – still not enough to obtain $10 million of new insurance on an after tax basis at a reasonable outlay. The challenge? How to obtain $10 million of insurance without paying full premium. Their advisor suggested SWAPP from Coventry. Coventry provided a $5.5 million guaranteed paid-up benefit along with a cash settlement of $600,000 which was used to obtain an additional $4.5 million policy to meet their total need of $10M. The advisor received commission on the transaction, the new sale and the renewal commissions on the original policy.
SWAPP
Policy
Universal Life
Insured
Female, age 79
Face Amount
$6,000,000
Cash Value
$1,300,000
Coventry First provided a guaranteed paid-up benefit of $3,400,000.
Case Details
The client still needed life insurance for estate planning purposes, but wanted to eliminate premiums to improve cash flow. A $2.9 million reduced paid-up policy was available from the life insurance carrier. Her agent suggested having the policy appraised by Coventry First to determine its market value. Because of her ongoing need for insurance, the client chose SWAPP with a guaranteed paid-up benefit of $3.4 million and no future premiums – a benefit worth $500,000 more than what the insurance company could offer.
SWAPP
Policy
Universal Life
Insured
Male, age 67
Face Amount
$1,850,000
Cash Value
$440,500
Coventry First provided a guaranteed paid-up benefit of $1,200,000.
Case Details
The insured owned three policies totaling $1.85 million that were issued eight years ago. Declining interest rates caused his annual premiums to double, forcing his advisor to seek a replacement policy along with additional coverage since the need for insurance had also increased. The client’s premium tolerance on the new policy was $40,000. The advisor suggested having the policies valued by Coventry First resulting in an offer of a $550,000 life settlement or a $1.2 million SWAPP with a paid-up death benefit. The client chose to SWAPP his original policy and obtained an additional $770,000 of insurance for his desired premium outlay. The result was a total net death benefit of $1.9 million for a total outlay of only $40,000. The advisor received a commission on the SWAPP, the new sale and renewal commissions on the original policy.
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