Uncertain Times Make Life Settlements Attractive For Seniors
Seniors are becoming more interested in non traditional sources of retirement income during these unstable economic times. One new strategy for seniors seeking cash are life settlements. Seniors with unwanted life insurance policies are now selling them for instant cash in life settlements.
Life insurance offers great financial security for when someone dies. Although, most believe that unwanted life insurance has little value outside of its original purpose. Most believe there only two things that can be done with unwanted life insurance. Either surrender the policy to the life insurance carrier or let the life insurance policy lapse. If the policy lapses the owner gets nothing. If the policy is surrendered to the insurance carrier, the policy holder usually gets very little.
Life settlements offer a third and more attractive option. A life settlement occurs when someone sells their existing life insurance policy for an immediate lump sum payment. The seller benefits by getting instant money which is often 200%-500% more than the cash surrender value offered by the insurance carrier. While the buyer, often a financial institution such as a bank or investment fund, pays the ongoing premiums and receives the death benefit when the policy matures.
Life insurance is an asset, just like stocks, bonds and real estate. As such, life insurance owners have the right to sell it. The right to sell one’s life insurance has been upheld by the Supreme Court since the 1800’s.
The life insurance settlement process is relatively straightforward and easy. Contacting a life settlement broker for a free analysis and consultation is the first step. These licensed professionals can provide an estimated value for a life insurance policy on the secondary market. After completing an application and collecting some documentation, the policy will be offered to a number of prospective buyers for consideration. From there, the policy seller simply chooses the most attractive offer and collects the life settlement proceeds.