Dec 07 2007
Life Insurance Settlements?
A Life Insurance Settlement, also called Life Settlements or a Senior Settlement, is an industry term used to describe the sale of an unwanted, unneeded or unaffordable life insurance policy in the secondary marketplace.
As people age, the life insurance policies they needed to protect their families and businesses when they were younger often become unnecessary, obsolete or even financially burdensome. Until recently, when this happened the only options available to policy owners were to either surrender the policy to the issuing insurance company for the policy’s “cash surrender value” (if it had any) or more often, simple allow the policy to lapse and forfeit all of the benefits that had been paid for.
Both options worked out GREAT for the insurance companies who gladly accepted the policy premiums for decades but then never had to pay the death benefits, but no so great for the policy owners themselves who received little or nothing for the policies they so diligently paid into for years, often even decades.
That is until now. This is where life settlements can make all the difference.
A life insurance settlement is created when the life insurance policy is sold on the secondary market to the highest bidder. This is possible because very often the “fair market value” is far in excess of the issuing company’s opinion of the “surrender value”. The new purchaser of the policy pays the policy owner a lump sum of cash for the right to become the new beneficiary on the policy.
The old policy owner is then free of the policy and doesn’t have to worry about paying premiums anymore. They are also free to use the money they received for anything they choose; vacations, bills, travel, quality time with family and friends … anything they want.
The purchaser continues making the premium payments, life goes on, and when the old policy owner finally passes, the purchaser receives the death benefit.
Is this option for everyone? No. But if you are in a situation where you have an unneeded, unwanted or unaffordable life insurance policy and you could use a lump sum of spendable cash instead, what have you got to lose by checking it out?
We offer FREE, non-binding appraisals so you can find out what your policy is really worth in the secondary market, and we also have a FREE informational video on our website that will explain the process and answer your questions.
