Life insurance is a critical financial tool, especially in retirement planning and wealth transfer. But many policyholders don’t realize they can sell a portion of their policy and still leave a legacy. This is made possible through a unique option called a retained death benefit. For residents in Fort Lauderdale, this solution offers both liquidity and long-term protection.
What Is a Retained Death Benefit?
A retained death benefit allows a policyholder to sell their life insurance policy through a life settlement while keeping a portion of the death benefit for their beneficiaries. Instead of surrendering the policy or letting it lapse, this option gives you cash now and guarantees a payout to loved ones later.
With Summit Life Insurance, Fort Lauderdale policyholders can explore retained death benefit strategies tailored to their financial goals.
How Retained Death Benefits Work
Here’s how it typically works:
-
You sell your life insurance policy through a life settlement.
-
The buyer agrees to provide a lump-sum payment to you.
-
As part of the agreement, you or your heirs retain a portion of the death benefit, typically tax-free.
-
When you pass away, your beneficiary receives the agreed-upon retained benefit.
This flexible structure is especially valuable for those who want immediate funds for retirement or healthcare but still want to leave something behind.
Why It Matters in Fort Lauderdale
The retained death benefit in Fort Lauderdale is gaining popularity among seniors and retirees who need a financial bridge but don’t want to forfeit their legacy. Given the rising cost of living, property taxes, and healthcare in South Florida, this option offers a smart balance between financial independence and estate planning.
Summit Life Insurance works closely with local residents to help them evaluate if this solution fits their needs.
Who Qualifies for a Retained Death Benefit?
You may qualify if:
-
You’re over age 65
-
You own a life insurance policy valued at $100,000 or more
-
Your health condition has changed since the policy was issued
-
You no longer need the full death benefit or can’t afford premium payments
Using a retained death benefit is especially helpful if your children are financially independent but you still want to leave a meaningful gift.
Benefits of Choosing a Retained Death Benefit
-
Cash Today: Receive a significant lump-sum payment immediately.
-
Legacy Tomorrow: Ensure part of the benefit still goes to your loved ones.
-
No Premiums: You’re no longer responsible for paying future premiums.
-
No Debt Obligation: The payment you receive is not a loan.
-
Tax-Advantaged: Proceeds are often tax-free, especially for viatical settlements.
At Summit Life Insurance, we guide you through these advantages and compare them to other options like surrendering or borrowing against your policy.
Retained Death Benefit vs. Full Life Settlement
While a full life settlement means selling the entire policy and forfeiting the death benefit, a retained death benefit splits the benefit between the buyer and your heirs. This allows you to:
-
Retain control over part of your legacy
-
Optimize your policy’s value
-
Keep your family involved in estate planning
Our team at Summit Life Insurance in Fort Lauderdale can help you compare both options to find the best solution.
Frequently Asked Questions
Q: Is a retained death benefit available for term insurance?
A: In some cases, yes—especially if the policy is convertible to permanent insurance.
Q: How much can I retain from the death benefit?
A: It varies, but it often ranges from 10% to 40%, depending on your policy and life expectancy.
Q: Do I need to continue paying premiums?
A: No. The buyer typically assumes all future premium obligations.
Q: Is this option available for people with chronic illnesses?
A: Yes, and it may be structured as a viatical settlement if the seller is terminally or chronically ill, which may offer additional tax benefits.
Work with Summit Life Insurance in Fort Lauderdale
Summit Life Insurance is a trusted name in the life settlement space. Our local Fort Lauderdale office specializes in solutions like retained death benefits and helps you maximize your policy’s value while keeping your estate goals intact.
We offer:
-
Free policy reviews
-
Transparent consultations
-
Licensed brokerage services
-
Custom settlement options, including retained benefits
Our process is simple, confidential, and fully compliant with Florida insurance regulations.
Conclusion: A Smarter Way to Balance Needs and Legacy
The retained death benefit in Fort Lauderdale is an ideal choice for seniors who want to unlock their policy’s value today without sacrificing tomorrow. Whether you’re covering medical bills, downsizing, or investing in your retirement lifestyle, this option keeps your family in mind.
Summit Life Insurance makes the process easy and stress-free. Reach out to our team for a free consultation and learn how your life insurance policy can serve both your present and your legacy.
