Abacus Life Settlements Calls for Greater Consumer Awareness of Options for Unwanted Policies in Post-ATRA Tax Environment

In the wake of the 2012 tax law that raised the estate tax exemption, many senior consumers are left with policies they had purchased for estate tax liquidity when the exemption threshold was much lower

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Abacus Life Settlements

Dec 02, 2014, 09:06 ET

NEW YORK, Dec. 2, 2014 /PRNewswire/ -- Abacus Life Settlements, a leading provider in the secondary market for life insurance, today called for establishing greater consumer awareness of the options available to seniors who no longer need life insurance policies purchased for federal estate tax purposes.

Due to the passage of the 2012 American Taxpayer Relief Act (ATRA), in 2015 estates valued at or below $5.34 million per person (or $10.68 million per couple), will pass to heirs federal-estate-tax-free. As a result, the need for larger life insurance policies may become unnecessary, and many senior policy owners are left wondering what they should do with their sizable life insurance policies. Still other seniors who may be living in approximately 20 state jurisdictions with inheritance tax liability, may need some form of life insurance coverage, but with a much lower death benefit amount.

Citing previous studies of high lapse rates for many life insurance policies, Abacus officials cautioned against allowing these unwanted policies to lapse, or accepting low cash surrender values when more favorable options are available. The company noted that in educational materials published online last year by Princeton University entitled "Lapse-Based Insurance," 76% of universal life policies sold to seniors at age 65 never pay a claim. And according to a study by actuarial firm Milliman, Inc., 88% of all universal life policies ultimately do not terminate with a death benefit claim.

Abacus officials urged life insurance advisors and estate planners to inform senior clients of all the options available for policies that no longer serve their original purpose. During annual review meetings, agents and tax advisors are encouraged to explore with the client all possible solutions to optimize their unwanted insurance asset. Abacus offers a number of solutions to address this concern including Cash Settlements, In-Force Financing and Retained Death Benefit. See "Types of Life Settlements" at the Abacus web site.

About Abacus Settlements, LLC
Founded in 2004, Abacus Settlements, LLC is a licensed life settlement provider with locations in New York and Tennessee. An active member of the Life Insurance Settlement Association (LISA), Abacus works with professional advisors and consumers in optimizing the value of their life insurance policies. Abacus is committed to providing consumers with the knowledge they need to make informed decisions regarding life insurance policies that are no longer needed or affordable. A life settlement may not be appropriate for all circumstances. Policy sellers should consider all options before entering into a Life Settlement. Abacus Settlements is not licensed in all states. Visit https://abacuslifesettlements.com for more information.

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Kimberly Judkins
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SOURCE Abacus Life Settlements