Perhaps you have reached retirement age and discovered that your monthly social security check and the money you have set aside are not enough to meet your daily living expenses. Another possibility is that the premium payment on your life insurance policy is becoming unaffordable. Some people have multiple policies and only need one. Others have beneficiaries that are now financially independent. All of these are good reasons to consider selling your life insurance policy through a life settlement.
What is a Life Settlement?
How a Life Settlement Works
You may have heard that it’s possible to sell your life insurance policy but are not entirely sure how the process works. With a life settlement payout, you sell your existing life insurance policy to a third party. You then receive a lump sum payment for selling your policy. The payout amount you receive is less than the policy’s value but more than its cash surrender value. The party that buys your life insurance policy continues to pay the premiums through the lifetime of the policy. When the insured passes, the buyer receives the value of the policy.
A life settlement differs from a viatical settlement in that a viatical is reserved for people with a life-threatening illness. If you do not have a life-threatening illness and wish to sell your policy, you must be at least 70 years old. Additionally, the value of your policy needs to exceed $100,000.
Benefits of Entering into a Life Settlement Agreement
If you no longer want or need your life insurance policy, there are several benefits in selling it through a life settlement. Below are just a few reasons why a life settlement is beneficial:
· Maintain a higher standard of living in your retirement years.
· Afford the best healthcare services to enhance your quality of life.
· Remove the stress of paying a monthly or quarterly life insurance premium.
· Fund long-term care if you or your spouse should need it.
· Money available for investing or paying off existing debts.
Steps Involved in Completing a Life Settlement
The first step is completing our simple online form to see if you qualify for a life settlement. If you meet the initial qualifications, we send the information you’ve provided to multiple life settlement companies. We put you in touch with multiple potential buyers, in one free, fast, and hassle-free step.
Once you’ve chosen a life settlement company to work with, you will be asked to complete an initial application from them. This application includes basic contact, health, and policy information. After the company receives this completed application, they will request policy and medical information on your behalf for verification purposes.
Once the company has all of the medical and policy information that they need, they order a life expectancy report. A life expectancy report plays an important role in the life settlement offer you receive as this report projects the lifetime amount of premium payments the new policy owner will have to pay. Therefore, this is a necessary step in the process. After the life expectancy report is reviewed, the company will present you with an offer based various factors including your age, health status, and policy premiums. It’s important to keep in mind that receiving an offer for your policy is absolutely no obligation to you. You have the right to accept or decline any offer you receive.
If you accept an offer, the company will send you a life settlement contract to review and sign. Once received, the company will then make arrangements with your life insurance carrier to inform them of the transfer of policy ownership. The life insurance carrier will then change the beneficiary of the policy to the new policy owner. Once the change of beneficiary has been confirmed, the life settlement company will immediately provide you the agreed upon lump sum payment.