As of the year 2009, over 150 million people owned life insurance policies. We certainly realize its importance in protecting our loved ones as these policies totaled more than ten trillion dollars. No one can doubt the peace of mind that a life insurance policy can provide at certain points in our lives.
The question becomes what to do with the policy once you and your family are no longer in need of the coverage a life insurance policy provides.
Reasons you may no longer need your life insurance policy
Some of the reasons policyholders feel they do not need their policies any longer include life changes, the expense of the policy itself, and a lack of need for the policy.
As life changes come about, policyholders may need medical treatment that their insurance company does not cover. Because the money from a life settlement can be used however the seller wishes, many choose to sell their life insurance policy to fund medical treatments for themselves or family members.
Sometimes as we age, money becomes more of an issue because of the increase in cost of living and the lack of income. A life insurance policy that is not needed any more can be one more expense for some people. A life settlement therefore allows them to receive a lump sum of money and they no longer have to make payments on the policy, which frees up some of their income.
Lack of need for the policy often occurs as people age. Sometimes the beneficiary of the policy is no longer living, or perhaps is no longer in need of the policy’s benefits. A life settlement becomes one way of saving some of the policy’s value, rather than simply allowing the policy to lapse.
Many consumers are unaware of their options
Unfortunately, the vast majority, over 90% according to life insurance experts, of policies lapse before they ever pay out a claim. Had these individuals been aware of the life settlement option, they may have been able to retrieve some of the policy’s value.
Laws and guidelines change
The last decade has seen explosive growth in the life settlement industry.
Life settlements have gained momentum because of laws in states such as Texas, which realizes the benefits that unneeded life insurance policies may provide for those in need of long-term care. In fact, some states have enacted legislation that requires life insurance agents to explain what a life settlement is. So, the more policyholders who realize that a life settlement is a viable option for an unneeded policy, the more who choose a life settlement.
It’s about choice
Thanks to government legislation, many more policyholders are becoming aware of the life settlement option. Many seniors now consider a life settlement as a tool to meet their future financial needs. They now realize that their policy is an asset that should be treated as such.
Contact us if you are interested in hearing more about the life settlement option.