For many Fort Lauderdale residents, life insurance is a long-term asset that may no longer serve its original purpose. Whether your financial priorities have shifted or you no longer need the full coverage, selling your policy through a life settlement may be a viable option. But what if you still want to leave something behind for your loved ones? Enter the retained death benefit—a flexible solution that provides immediate financial benefits without forfeiting the entire death benefit. At Summit Life Insurance, we specialize in helping policyholders unlock this strategic option with confidence.
What Is a Retained Death Benefit?
A retained death benefit is a feature offered in some life settlement transactions that allows the original policyholder to keep a portion of the policy’s death benefit after selling it. This means that upon your passing, a portion of the policy payout will still go to your designated beneficiaries—even though you received cash from the settlement during your lifetime.
In Fort Lauderdale, where residents value both financial independence and legacy planning, this option offers the best of both worlds. Summit Life Insurance helps you evaluate how this structure can support your unique needs.
How Does It Work?
Instead of receiving the full value of your policy in a lump sum, you negotiate a deal with the buyer where you accept a smaller cash payment today in exchange for retaining a portion of the future death benefit. The buyer then assumes ownership of the policy and is responsible for paying future premiums.
At Summit Life Insurance, we work with a network of licensed providers in Fort Lauderdale to negotiate favorable retained death benefit agreements tailored to your financial goals.
Benefits of Choosing a Retained Death Benefit
There are several key advantages to choosing a retained death benefit in Fort Lauderdale:
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Legacy preservation: Maintain a portion of the death benefit for heirs or loved ones.
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Immediate liquidity: Receive cash to fund retirement, healthcare, or other needs.
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No future premium payments: The buyer pays all future costs.
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Tax-efficient solution: In some cases, retained death benefits may be more favorable than taxable lump-sum settlements.
With Summit Life Insurance guiding the process, Fort Lauderdale policyholders gain a customized solution that balances short-term needs and long-term security.
Who Qualifies for a Retained Death Benefit?
Eligibility for a retained death benefit typically mirrors the qualifications for a life settlement:
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You’re 65 or older, or younger with a serious health condition.
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Your life insurance policy is worth $100,000 or more.
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The policy has been active for at least two years.
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You’re willing to sell part of the policy in exchange for upfront funds.
If you meet these criteria, Summit Life Insurance can help determine whether a retained death benefit is the right choice for your Fort Lauderdale situation.
Retained Death Benefit vs. Full Life Settlement
While a traditional life settlement gives you a larger upfront payout, it removes all future benefits for your heirs. A retained death benefit offers a hybrid approach—allowing you to benefit today while still leaving something behind for loved ones.
In Fort Lauderdale, where multi-generational planning is common, this structure is ideal for policyholders who want to balance personal financial security with legacy preservation. Summit Life Insurance ensures a fair and transparent comparison between both options so you can make an informed decision.
Tax Considerations
One of the most common questions Fort Lauderdale policyholders ask is whether retained death benefits are taxable. Generally:
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The cash portion of the settlement may be subject to taxes, depending on your cost basis.
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The retained portion of the death benefit paid to your heirs may not be taxable, similar to traditional life insurance death benefits.
Summit Life Insurance encourages clients to consult with a financial or tax advisor to fully understand the implications. We can also connect you with trusted local experts for guidance.
Why Fort Lauderdale Residents Choose Summit Life Insurance
With so many brokers and settlement companies in the market, Fort Lauderdale policyholders trust Summit Life Insurance for several reasons:
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Local expertise in Florida’s regulatory environment
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Personalized service with a focus on client outcomes
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A large network of qualified institutional buyers
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Full transparency and ethical business practices
Our team is dedicated to providing clear, compassionate guidance throughout the retained death benefit process, ensuring that every client feels confident in their decision.
FAQs About Retained Death Benefit in Fort Lauderdale
1. Can I choose how much of the death benefit to retain?
In most cases, yes. The amount depends on the policy value, your health, and the buyer’s offer.
2. Is a retained death benefit better than a full sale?
That depends on your financial goals. If you want both upfront cash and a legacy, this option offers the best of both.
3. Will I still be responsible for premium payments?
No. After the sale, the buyer assumes all future premium obligations.
4. Does this affect my Medicaid eligibility?
Possibly. It’s important to review this with an advisor, but we can help you find experts who specialize in Medicaid planning.
5. How long does the process take?
Typically, 3 to 6 weeks, depending on the policy and documentation required.
Final Thoughts
A retained death benefit is a powerful tool for Fort Lauderdale policyholders seeking flexibility, legacy preservation, and immediate financial relief. If you’re exploring ways to get more value from your life insurance policy, this option could be the right fit.
Summit Life Insurance is here to guide you every step of the way—from policy review to final settlement—ensuring you and your loved ones receive the financial benefits you deserve.
Contact Summit Life Insurance today to explore whether a retained death benefit in Fort Lauderdale is the smart choice for your future.
