When it comes to managing life insurance in retirement or during times of financial uncertainty, many seniors in Fort Lauderdale are exploring life settlements as a strategic alternative to lapsing or surrendering their policies. However, there’s an increasingly popular option within life settlements that combines immediate financial gain with a continued legacy benefit: the retained death benefit.
At Summit Life Insurance, we specialize in helping policyholders understand and take advantage of retained death benefit in Fort Lauderdale. This blog will explain what a retained death benefit is, how it works, who it benefits, and why it might be the best solution for your financial goals.
What Is a Retained Death Benefit?
A retained death benefit (RDB) is an option offered in some life settlement transactions. Instead of selling your entire life insurance policy for a lump-sum cash payment, you retain a portion of the death benefit to be paid to your beneficiaries when you pass away.
Here’s how it works:
- You sell your life insurance policy to an institutional buyer.
- The buyer assumes premium payments and ownership of the policy.
- Instead of receiving the full value as a one-time cash payout, you agree to retain a guaranteed portion of the death benefit.
- When you pass away, the agreed-upon portion is paid directly to your named beneficiaries.
This allows you to unlock immediate financial value from your policy while still preserving a legacy for your loved ones.
Who Can Benefit From a Retained Death Benefit?
The retained death benefit is an excellent option for individuals who:
- Want to access funds now but still leave something behind for their heirs.
- Have a life insurance policy they no longer need or can’t afford to maintain.
- Are concerned about high premiums or reducing policy value.
- Are not satisfied with surrender value offered by the insurance company.
If you're a senior or retiree in Fort Lauderdale, where high living and healthcare costs are common, retaining a portion of your death benefit while eliminating premiums can be a wise financial move.
Why Choose a Retained Death Benefit Over a Full Life Settlement?
When you opt for a traditional life settlement, you receive a one-time payment and forfeit all future benefits of the policy. That may work for some, but others want to strike a balance between present needs and future legacy.
Here are key reasons to consider an RDB instead:
✅ Leave a Legacy
Even if you need cash now, you might still want to provide for your spouse, children, or grandchildren later.
✅ Tax Advantages
While life settlements may be taxable depending on the gain, the retained portion of the death benefit is generally paid income tax-free to your heirs.
✅ Reduced Financial Pressure
With an RDB, you no longer have to pay premiums, freeing up monthly cash flow—especially useful for those on fixed incomes.
✅ Flexibility
You can often negotiate how much death benefit to retain versus how much cash to receive, depending on your financial goals.
The Process: How to Set Up a Retained Death Benefit in Fort Lauderdale
Working with a reputable company like Summit Life Insurance ensures a smooth and transparent experience. Here’s how the process typically works:
Step 1: Policy Review
We begin with a free policy evaluation to determine your eligibility for a life settlement with retained death benefit options.
Step 2: Market Your Policy
We present your case to a network of institutional buyers who offer both cash settlements and RDB packages.
Step 3: Receive Offers
You receive competitive offers that may include:
- A reduced cash payout + retained death benefit
- Full cash offers (if you prefer)
Step 4: Choose and Close
You select the offer that best fits your goals. We handle all legal, financial, and medical coordination to finalize the sale.
Step 5: You’re Covered
The buyer takes over premium payments. You receive your cash, and your retained death benefit is secured for your beneficiaries.
Why Fort Lauderdale Residents Are Turning to Summit Life Insurance
Summit Life Insurance has been a trusted name in Fort Lauderdale for years, offering personalized life settlement solutions, including retained death benefit structures. We understand the unique financial challenges that seniors in Florida face—rising healthcare costs, inflation, and the desire to balance today’s needs with tomorrow’s legacy.
Here’s why local residents choose us:
- ✅ Licensed and regulated by Florida authorities
- ✅ Access to top institutional buyers offering RDB options
- ✅ Transparent process with no hidden fees
- ✅ Personalized attention from local professionals
- ✅ Deep experience in Florida’s life settlement and insurance landscape
Frequently Asked Questions
Is a retained death benefit taxable?
The cash portion of a life settlement may be taxable depending on policy basis and gain, but the retained death benefit is typically income tax-free when paid to beneficiaries. Always consult a tax advisor for personalized guidance.
Can I choose how much of the death benefit to retain?
Yes. Offers can often be structured to reflect your preferences—for example, 30% retained death benefit and 70% cash.
What types of policies qualify?
Most universal, whole, and convertible term life insurance policies with a face value of $100,000 or more can be considered.
Do I still need to pay premiums?
No. The buyer takes over all premium payments after the sale is finalized.
Real-Life Example: Blending Legacy and Liquidity
Let’s say a 76-year-old Fort Lauderdale resident has a $500,000 universal life policy. She no longer needs the coverage but doesn’t want her children to lose out entirely. Through Summit Life Insurance, she secures a deal where she receives $125,000 in cash plus a retained death benefit of $150,000. She stops paying premiums, gains financial freedom, and still leaves a meaningful gift to her family.
Final Thoughts: Secure Your Future and Your Legacy
If you’re a policyholder in Fort Lauderdale and want to unlock the value of your life insurance without completely giving up your family’s financial security, the retained death benefit option could be the perfect solution. You deserve a plan that provides for today and tomorrow—and Summit Life Insurance is here to help you achieve exactly that.
📞 Schedule Your Free Policy Review
Contact Summit Life Insurance today to learn more about your eligibility for a retained death benefit in Fort Lauderdale. Whether you're considering a full life settlement or want to preserve part of your legacy, we're ready to guide you every step of the way.
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