A Guide to Life Insurance Settlements

2007-03-08 10:33:40

( Insurance )



In the past, when one had a life insurance policy that was no longer required. The policyholder either made the policy lapse or decided to exchange it for the face value of the policy by surrendering it. With the development of life insurance settlements, you can now give your life insurance policy to a financial institution in exchange for cash. Whole life, term insurance life, corporate life, survivorship, key man policies and even irrevocable life insurance trusts can be converted to claim life insurance settlements.

There are two main types of life insurance settlements: viatical settlements allows a terminally ill person to convert the present value of their life insurance policy to pay for their medical bills; the other type, life settlement has already been discussed above.

Aside from settling their medical bills, some people opt for a life insurance settlement for a number of reasons: some feel there is no need to continue payments on the policy; others can no longer afford making payments while others wish to improve the quality of their life.

When applying for claim settlements, it is strongly recommended that one find a reputable life settlement broker who can assist in obtaining the highest value possible for your insurance policy. You should do a background check on several broker companies before making a final selection: some life settlement brokers only have affiliations with only one or two funding companies and thus, the highest possible price for your policy will not really be obtained. Do be cautious when selecting your broker; there are quite a few settlement brokers today who advertise but have very limited knowledge on how to negotiate and deal with funding companies.

In order to claim settlements for life insurance, the policyholder must provide the life settlement broker with a copy of the life policy. The broker will then collect pertinent policy and medical information. The broker then sends the information various funding companies who will appraise the value of the policy; with the aid of a life settlement broker the best price possible is negotiated. The best quotes are then communicated to the policyholder who then has a choice to accept or reject an offer. If an offer is accepted, the contract is drafted, signed and delivered. Insurance settlements are received with the service fee of the broker already deducted from the amount of the settlement.


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