The senior citizens who have an unwanted life insurance policy had two basic choices. They could either let the insurance policy to lapse or surrender it for the cash value for a typically much less compared to the death benefit. Currently, a third choice has materialized and that is life settlements for seniors.
Still somewhat new in the investment business, a life settlement is selling or vending a life insurance policy to a third party stakeholder. In doing this, you may obtain less than the death benefit, but you can receive much more than the worth of the cash surrender. It is worth noting that the investor will continue paying on the policy and he/she will receive the death benefit the moment you die.
Why Would Anyone Want a Life Settlement?
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There are a lot of different reasons why a senior citizen would choose for a life settlement and here are just some of it:
- One more life insurance policy has been acquired.
- The policy was initially bought for their children, who no longer necessitate it.
- The policyholder has a huge estate and doesn’t need the life insurance any longer.
- Unforeseen health problems have occurred and the money is needed immediately.
- The payments have become extremely high.
- It offers a hefty payout straightaway, and the money can be utilized for anything they wanted.
Who Can Take Advantage Of The Life Settlement?
Before coming up with a big financial decision like selling your life insurance policy, it’s very significant for you to do your homework and choose if it will be the best choice for you. With that being said, there are some people who can have a great advantage from a life settlement. The ultimate candidates are those who:
- Are above 65 years old.
- Have a life insurance policy that has a worth of no less than $250,000.
- Have the change in their insurability ever since the insurance policy was started.
In case you don’t fall into any of the aforementioned categories, it doesn’t mean that a life settlement isn’t an option for you. You can weigh the pros and cons, oversee how much you stand to lose, or make, and go on from that point.
Moreover, for senior citizens who wanted to escape from their current life insurance policy, a life settlement may possibly be the answer. No matter the whys and wherefores for wanting to sell it, life settlements are merely for life insurance policies that you’re ready and prepared to hand over.
Cover Photo Credits: Perisan Life Settlements