Life settlements can be an excellent option for obtaining funding for retirement, medical expenses, or other cause. Unfortunately, some people shy away from the process due to the misinformation they have heard about life settlements that they assume is true. Although many such myths exist, we discuss five of the most common ones below.
Myth #1: You Must Be Terminally Ill to Qualify for Life Settlements
Life settlements for the terminally ill, first came on the scene approximately 30 years ago in the form of a viatical settlement. For several years, they were the only option for cashing in an unwanted life insurance policy. However, today you can sell your life insurance policy without a terminal illness if you’re at least 76 years old and meet other criteria.
Myth #2: Most People Sell Their Policies to Pay Medical Bills or Living Expenses
While this is certainly the reason some people sell their life insurance policy, it’s far from the only one. In fact, more people decide on life settlements because they no longer need their policy than to obtain the funds needed for medical expenses or daily living expenses. Additionally, the 2017 Tax Cuts and Jobs Act made a significant amount of life insurance policies unnecessary. That is because it more than doubled the estate tax exemption for both individual and married taxpayers.
Myth #3: A Life Insurance Policy Needs to Be Worth at Least $1 Million to Sell It
Although it’s true that some investors only express interest in high-value policies, others are willing to work with clients as long as their policy holds a minimum value of $100,000. This minimum value is one of just three criteria we ask of people wanting to use Sell My Life Insurance Policy to a third party through our service.
Myth #4: Life Settlements Are Not Regulated or Legal
When life settlements first became popular a dozen or so years ago, people questioned whether they were legal. The answer is a definite yes. In addition to Puerto Rico, 43 of the 50 states have laws on the books regulating the sale of life insurance policies. You can choose a network referral provider, such as Sell Life Insurance Policy, to find the best deal.
Myth #5: The Government Restricts How You Can Spend the Proceeds of Life Settlements
At the opposite end of the spectrum from those who believe the above are those who think the government puts tight controls on how recipients of a settlement can spend their funds. The truth is you can spend the money any way you would like, including going on a vacation or donating to charity. Paying off or refinancing debt, providing financial assistance to children or grandchildren, and retirement funding are some additional common ways that people spend the money they receive from life settlements.
Complete a Short Form to See if Your Policy Qualifies
Are you considering selling your life insurance policy but aren’t sure which steps to take next? Getting started is easy! Simply complete our quick qualification form to begin the process of being connected with the industry’s top buyers.