What is a life settlement?
A financial transaction that provides the owner of an unwanted or unneeded life insurance policy a lump sum of money in exchange for the policy’s benefits is known as a life settlement. This financial transaction allows the owner of the policy freedom from making the policy’s premium payments as well as a sum of money that can be used for any purpose.
A licensed life settlement company will purchase the unwanted policy and become the policy’s beneficiary, making all future premium payments, and in exchange, the seller receives a lump sum of money, which is usually greater than the cash surrender value of the policy.
Why choose a life settlement?
As people age, their needs change. They may no longer need the life insurance policy they purchased years ago; it may have already protected their loved ones and now that money may be needed elsewhere. The money that goes toward the policy’s premium payments may be needed more urgently for basic needs.
A life settlement offers this policyholder options to simply surrendering the policy or allowing the policy to lapse. A life settlement usually nets more money than the cash surrender value of the policy provides.
Who qualifies for life settlements?
Seniors 70 years and older are typically eligible for a life settlement.
A life settlement allows these seniors the option of converting this unneeded policy to money that is needed.
What is the process for a life settlement?
Our team of experts will work with each policyholder throughout the entire life settlement process. Once an offer has been secured by the life settlement advisor, it is taken to the seller for approval. From here, our team will guide the seller until his or her lump sum of money is received from the transaction.
The benefits of a life settlement
Life settlements offer short term benefits. The most immediate benefit is that the original owner no longer makes the premium payments. This alone can free up a substantial amount of money. In addition, the seller receives a lump sum of money for the policy.
Life settlements offer long-term benefits as well. The money that is obtained from the sale of a policy can be used to purchase other assets, such as a business, a college tuition, or even investment opportunities.
What is the next step?
If you or a someone you know is considering a life settlement as a vehicle for financial freedom, or would like more information about the process of a life settlement, please contact us today.