A life settlement is the sale of a life insurance policy covering a person who has a limited life expectancy - normally 10 years or less. It presents a unique opportunity to extract the maximum value of a Senior's existing life insurance policy and repurpose those funds for whatever financial needs they may have.
Until recently, the owner of an unneeded or unwanted policy had two options - sell the policy back to the institution that issued it for its cash surrender value (if any) or allow the policy to lapse.
By utilizing the services of a life settlements company your life insurance policy will be submitted throughout the secondary market. Each new offer generated through this process results in more money for you.
Opportunities for life settlements may arise in the following circumstances:
-The policy owner can no longer afford the premiums.
-There is a need for a lump sum of cash to fund a project or acquisition.
-The commercial circumstances that the policy was taken out for are no longer valid. For example, the business has been sold or the loan has been repaid.
-The personal circumstances that the policy was taken out for are no longer valid.
Some key financial benefits to life settlements include:
-Purchasing investments and other insurance products.
-Funding long term care.
-Making gifts to heirs or charities.
-Maintaining a comfortable retirement lifestyle.
-Achieve a number of other financial objectives.
A life settlements agent will broker an existing policy for an amount greater than the policy's cash surrender value, or greater than the amount the policyowner would receive if they choose to allow the policy to lapse. In most cases, the policy being considered for sale is not performing to the expectations of the policyholder. Sometimes, the original need for the policy has changed, and the premiums to keep it current have become a financial burden.
When properly employed, a life settlement offers an opportunity for you to benefit from no longer wanted or needed insurance coverage. The majority of secondary market transactions result in the sale of another financial product or service with the capital generated by the sale of the original policy. Case studies have indicated how this capital may be used to broker a new and better performing insurance product proven more suitable for your current needs.
How do you get paid?
In recent years, companies have sprung up for the purpose of brokering the purchase of policies, and some have been formed to buy policies. The latter pool money from many investors and have elevated the business to an institutional level so that sellers may feel confident they will not become target of a scam. Given the potential for fraud in a life settlements, buyers and sellers need to perform due diligence.
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Frequently Asked Questions
Do people need life insurance on their kids
By: DaveS | 14-07-2008
Do people need life insurance on their kids
Is wife due any proceeds of life insurance policy ...
By: stephen bilsky | 06-07-2008
is wife due any proceeds of life insurance policy in florida if she was not listed as a beneficiary?
What is contingent beneficiary? I have a husband ...
By: keiichi | 25-06-2008
What is contingent beneficiary? I have a husband and two little children. I need to designate them as beneficiaries. Should I designate my husband as primary benificiaries and two kids as contingent beneficiaries, or should I designate all of them as primary?
In the State of Michigan, or more specifically ...
By: profitbob | 11-06-2008
In the State of Michigan, or more specifically, Wayne County, what type of insurance is required for a handyman.
Insurance policy holders
By: roxysmom87 | 11-06-2008
How do I match insurance policy holders with the right plan?
Citizenship abroad
By: aimeeirv08 | 09-05-2008
how do I prove country of residence for a deceased person, when I cannot produce the passport or green card?
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