TRC Financial Executes a Life Settlement Transaction for a $10,000,000 Life Insurance Policy


Irvine, CA, January 27, 2020 -- TRC Financial, an independent insurance brokerage firm, recently negotiated and closed a life settlement transaction for a $10,000,000 life insurance policy on behalf of a high net worth (HNW) client.


The client acquired the life insurance coverage in 1995, at the age of 55, with the intent to use the death benefit proceeds to fund a portion of the federal estate tax and to also provide liquidity to equalize inheritance to heirs. To this end, the coverage was funded outside the estate and owned within an ILIT (Irrevocable Life Insurance Trust).


This year, at age 79, the client completed a review of his estate plan and no longer needed the life insurance coverage. The circumstances that had changed included: 1) through a series of estate planning techniques, the client had successfully transferred assets outside of his taxable estate; 2) 2017 HR 1 (“Trump Tax Cut”) increased the size of the available estate exemption sheltering more assets from estate tax; 3) ongoing life insurance premiums were going to put a burden on cash flow for current lifestyle needs; and finally, 4) his heirs already had “enough” wealth transferred to them.


With this is mind, TRC Financial was tasked with “selling” the life insurance policy to an institutional life settlement buyer. TRC Financial began by gathering the client’s medical records and ordering independent life expectancy reports. TRC also contacted the insurance carrier and ordered updated premium projections (inforce life insurance policy illustrations). With life expectancy estimates and premium cash flow projections, TRC Financial reached out to the institutional life settlement market in order to secure formal bids. After a 3-week bidding process, a final offer of $2.7 million was accepted by TRC Financial on behalf of the client. Over the next 3 weeks, TRC Financial facilitated all of the closing documents and the client received the life settlement proceeds.


“It is really important to create a competitive structure whereby multiple institutional buyers can compete for the highest offer,” said TRC Financial Principal, Darren Gallaway. “Not doing so, can result in much lower outcomes.”


For assistance with evaluating if you qualify to sell your life insurance policy, please contact us or visit our Life Settlement Services page to schedule a call. For a brief overview about the taxation of a life settlement, see our post “Life Settlement Taxation Clarified by the New Tax Law.”


About TRC Financial


TRC Financial is an independent firm that delivers a reliable and unbiased approach to acquiring and managing life and disability insurance portfolios and innovative benefit plans. Our focus centers around proprietary plan design, product placement, and administration for life insurance, life settlements, disability insurance, executive benefit plans, and private placement insurance investment accounts. We are the oldest and most established firm of its type in Southern California.

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TRC Financial Insurance Services and affiliates are presently licensed to sell insurance and annuity products, as well as other securities products in the following states: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Washington, West Virginia and Wisconsin. Residents of other states should consult with a local registered representative for insurance services and securities products. Proper state registration is mandatory prior to conducting business in that state. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and a client suitability review. CA License - #0E14614 \ CA License #0B40789 \ CA License #0B52893 - The principle place of business and the state of domicile for TRC Financial is: 1 Post, Suite 150, Irvine, CA 92618. Securities offered through Registered Representatives of M Holdings Securities, Inc., a Registered Broker/Dealer Member FINRA / SIPC. Check the background of this Firm and/or investment professional on FINRA's BrokerCheck. TRC Financial is independently owned and operated and is a Member Firm of M Financial. Please go to www.mfin.com and click on “Disclosure Statement” at the bottom of the home page for further details regarding this relationship. For important information related to M Securities, refer to the M Securities’ Client Relationship Summary (Form CRS) by navigating to https://mfin.com/m-securities.

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