When To Consider Taking Cash For Your Policy Under A Life Settlement
If retirees have no use for their policy, then they should take what money they can get for it. If it's a policy with cash value, then they should find out what the insurance company will pay as a surrender value.
But surrender values may be disappointing. A life settlement industry has emerged based on the belief that there's more value in many life insurance policies than what the policy holder, i.e. you, can get for surrendering the policy back to the life insurance company.
Life settlement companies will pay you cash to take over ownership of your policy including paying any remaining premium payments in return for receiving the death benefit when you die. What their willing to pay you, though, is based on your health records and what they judge as your remaining life expectancy. The longer they expect to wait for your death, the lower they'll pay you for transferring ownership of the policy to them.
Of course, life settlement companies are interested in making a little profit too for their risk. But they often can still give you more for your policy than your life insurance is willing to give you.
These life settlements needn't be of the viatical type - where you're required to be terminally ill with under 2 years left to live. Now, you can still be fairly healthy and have as much as 10 years to live; of course they don't want to wait forever!
The life settlement companies will compete with each other to bid for ownership of your policy based on what they think it's worth to them.
If you're interested in looking into a possible life settlement, here's what makes it worthwhile for settlement companies to make a bid for your policy:
* You must have a life insurance policy with a cash value. If it's a term life insurance policies, then it must be convertible to permanent insurance. It's the cash value of the death benefit that they want.
* Your policy's death benefit should be at least $200,000 since lesser amounts tend to make evaluating them uneconomical.
* The settlement company investors will want access to your medical records so their medical actuary can estimate your remaining life expectancy. This is their key information for determining what your policy is worth to them.
* You should be 65 or older
Obtaining a settlement is a bid/sell arrangement. Different investors seeking to buy your policy will have different overhead costs and perhaps make a different appraisal of your remaining life expectancy- so their bids will vary.
Be sure to get several quotes from different settlement companies if you do decide to sell your policy rather than surrender it to you own insurance company.
But surrender values may be disappointing. A life settlement industry has emerged based on the belief that there's more value in many life insurance policies than what the policy holder, i.e. you, can get for surrendering the policy back to the life insurance company.
Life settlement companies will pay you cash to take over ownership of your policy including paying any remaining premium payments in return for receiving the death benefit when you die. What their willing to pay you, though, is based on your health records and what they judge as your remaining life expectancy. The longer they expect to wait for your death, the lower they'll pay you for transferring ownership of the policy to them.
Of course, life settlement companies are interested in making a little profit too for their risk. But they often can still give you more for your policy than your life insurance is willing to give you.
These life settlements needn't be of the viatical type - where you're required to be terminally ill with under 2 years left to live. Now, you can still be fairly healthy and have as much as 10 years to live; of course they don't want to wait forever!
The life settlement companies will compete with each other to bid for ownership of your policy based on what they think it's worth to them.
If you're interested in looking into a possible life settlement, here's what makes it worthwhile for settlement companies to make a bid for your policy:
* You must have a life insurance policy with a cash value. If it's a term life insurance policies, then it must be convertible to permanent insurance. It's the cash value of the death benefit that they want.
* Your policy's death benefit should be at least $200,000 since lesser amounts tend to make evaluating them uneconomical.
* The settlement company investors will want access to your medical records so their medical actuary can estimate your remaining life expectancy. This is their key information for determining what your policy is worth to them.
* You should be 65 or older
Obtaining a settlement is a bid/sell arrangement. Different investors seeking to buy your policy will have different overhead costs and perhaps make a different appraisal of your remaining life expectancy- so their bids will vary.
Be sure to get several quotes from different settlement companies if you do decide to sell your policy rather than surrender it to you own insurance company.
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