Life Insurance Settlement

A "life insurance settlement" occurs when you sell your life insurance policy to a third party investment company. This settlement only applies to permanent types of policies, or those that build cash value over the life of the policy.

Seniors are the most likely to be involved in a life insurance settlement, since they no longer have dependents (any children are now grown and making their own incomes), nor do they need to financially protect a spouse, who is living off of a pension and/or retirement savings. Seniors are also likely to be debt free, with the mortgage paid off and few other debts to account for.

Protect your dependents by requesting a free life insurance quote today!

A life insurance settlement is an attractive deal to those wanting to receive cash in exchange for their policy, while they are living. Identifying whether or not a settlement is best for you requires an understanding of the process.

BENEFITS OF A LIFE INSURANCE SETTLEMENT

In addition to the cash received as a result of a life insurance settlement, you will no longer be responsible for premium payments since you no longer own the policy. Also, while the investment company pays a percentage of the policy’s value, it usually is a bigger payout than the cash value you would receive if the policy was surrendered. This money can be a significant help for supplementing retirement, estate planning, extended care, or investment opportunities.

LIFE INSURANCE SETTLEMENT DRAWBACKS

By selling your policy, you no longer have life insurance coverage, so your beneficiary will not have any insurance benefits when you die. In the event that your health deteriorates, you may not be able to obtain another policy to replace the one you sold.

Also, there has been much discussion about insurance and investment scams and fraud. Carefully research companies that purchase policies to avoid scams.

As with any decisions about life insurance, please take the time to do your research. Make sure that the company you want to sell to is reputable and is licensed. Also, shop around to determine the best settlement amount for your policy.

WHAT’S IN IT FOR THE INVESTOR?

While the investment company purchases your policy for a fraction of its value and makes the premium payments, it gains the death benefit when you die. Depending on when that is, the investment company stands to make a fair amount.

WHAT’S IN IT FOR YOU?

Compared to surrendering your policy back to the originating insurance company, you will get significantly more money from selling the policy to an investment company.