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Life Insurance Settlement ! Sale Of A Life Insurance Policy!!
By Paul Sherman
A Settlement is the sale of a policy to a third party in exchange for a cash settlement in excess of cash surrender value of the policy, even if none exists! This is also called as settlement, Insurance settlement or Senior settlement.
This innovative wealth and estate planning tool removes the burden of expensive insurance premium payments in addition to providing the lump sum cash settlement. This allows policy holders to get cash out of their policy, in an amount in excess of the it's cash value (if any), while they are still alive. To get the highest life settlements is to improve the quality of life during your retirement years.
Life settlement: When an individual who does not have a terminal or chronic illness sells a policy for other reasons, including changed needs of dependents, wanting to reduce premiums, and cash for meeting expenses, that is known as a Life settlement.
Viatical settlement: When an individual with a terminal or chronic illness sells his or her policy that is known as a viatical settlement.
Hitherto, elderly Americans with policies they do not need or cannot afford to keep up have had little option. They will let the policies lapse or sell them back to their insurers. Now lots of them are glad to have an alternative buyer. Clients may now be able to sell their policy for far more than the cash surrender value the insurance carrier would offer.
The policy owner sells his or her contractual rights under the policy at its present market value in exchange for a lump sum cash payment, which payment exceeds the cash surrender value of the policy. The purchaser of the policy will then become the new owner and the new beneficiary of the policy and is then responsible for making all of the future premium payments. The new owner now collects the full amount of the death benefit when the insured dies.
Life Insurance settlement or Life settlement present a unique opportunity to the policy holder to extract the maximum possible value from an existing policy and repurpose those funds for whatever financial needs may exist.
Clients will often ask if there are any restrictions on what the cash payment can be used for. The answer is that there are no restrictions whatsoever on what the cash payment can be used for. They can use the money to purchase new insurance, travel the world, start a business, buy a property or fulfill their dreams. The money is theirs to simply enjoy and use it for any reason they can think of. In fact, seniors can use the cash settlement for medical expenses, living expenses, or anything they desire, with no restrictions.
There are various reasons why individuals sell their policy.
Why sell a policy?
1. If you are chronically ill, selling your current policy provides needed funds to cover financial burdens caused by your illness. A viatical settlement gives you the ability to regain needed financial security.
2. If you are over the age of sixty-five, a life settlement maximizes your current assets by eliminating premiums and getting funds that can be used today.
3. Pay off debts
4. Make funds available for other investments
5. Turn a lapse insurance policy into cash
6. Pay your medical care bills
7. Finance your retirement
8. If you are a corporation, selling corporate owned lets you regain back premiums paid on no longer needed policies.
9. If you are a non profit organization, selling a gifted policy provides funds that can be used now and also eliminates premiums.
10. If you managing an estate, selling your current policy will help manage changes in estate size, eliminate premiums, and liquidate policies that no longer are needed.
How much money will the clients get when they sell their
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policy?
The value of a policy is determined by a number of factors, including, but not limited to,
1. Face value of the policy
2. The age and medical condition of the insured
3. Estimated mortality of the insured
4. Loans against the policy
5. Rating of the insurance carrier
6. Cash value of the policy
7. Type of policy and prevailing interest rates
8. The net death benefit
9. Premium payments required to keep the policy in force
Typically, a life settlement is about three to five times the cash surrender value of the policy.
What Policies Qualify?
To find out whether you qualify, here are some of the requirements.
(A) Must be at least 65 years of age
(B) The face value of the policy is at least $50,000
(C) The insured has experienced deterioration in health since the insurance policy was issued; life expectancy is under 15 years
(D) The insurance policy is in effect beyond the two year contestable period
But any policy owner, including individuals, corporations, charities or trusts, may sell any policy, including group and term policies.
What types of polices are purchased?
1. Government issued policies
2. Term Life
3. Universal Life
4. Survivorship policies
5. Many Group types of policies
6. Corporate Owned
7. Whole Life
8. Basically All Types of Policies
Experts at Financial-Ease assist in achieving the highest value for their client's policies. Their goal is to get you the highest price for your policy. Their mission is to serve clients with highest offers with honesty, integrity and confidentiality and get fast closings and payments
The life settlement value could be potentially much higher than the cash settlement of your policy. Don't continue to pay expensive premiums for coverage you no longer need, and don't surrender the policy or let it lapse. The settlement solution is typically the Win-Win scenario that you have been looking for. Article Source: http://articles-galore.com Paul Sherman is a Cash Flow Consultant. He offers free, professional and independent advice to Individuals, Business owners and Seniors regarding Life Settlements, Structured Settlements, Mortgage & Business notes, Lawsuit funding etc.To sell your Life Insurance & Structured settlement please visit www.Financial-ease.com
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