WORRYING ABOUT OLD AGE? SETTLE DOWN WITH LIFE INSURANCE SETTLEMENTS

2007-03-08 10:33:40

( Financial )



Today's senior citizens are looking at a new financial tool that will help them take care of their health expenses, pay off their mortgages or just have something to live on everyday. They can tap on the value of their life insurance policies by availing of life insurance settlements.

Life insurance settlements allow policyholders to sell their policies to a third party for a value higher than its cash surrender value, but lower than its net death benefit. There are two types of life insurance settlements - viaticals and senior life settlements. A viatical life insurance settlement usually is used for someone who has a terminal illness and is given two years or less to live. A senior life settlement is usually offered to a senior over the age of 65, who is reasonably healthy and has a life expectancy of up to 15 years.

Applying for life insurance settlements is fairly simple. You meet a life settlement broker to apply for a viatical or senior life settlement. You fill out an application form. Your broker evaluates and sets a value for your policy. He will then contact prospective buyers, who will make an offer if they are interested in your policy.

You are the one who decides if you want to accept the offer or not. Once you accept the offer, the life settlement broker prepares the closing documents. The purchasing company pays you a lump sum value and assumes the premium payments. They will collect the total benefit when your policy matures.

Although the process sounds fairly simple, there are several risks involved in availing of life insurance settlements. Since this investment is not regulated, some unscrupulous companies are taking advantage of senior citizens who are unaware of the risks. Here are some tips to help you get the best deal on your life insurance settlements.

Before opting for life settlements, ask your insurer if your policy has accelerated death benefits. If you qualify for accelerated death benefits, you might a higher amount than from life insurance settlements.

Do your research before choosing your life settlements broker. Inquire with different companies since the application process is of no cost to you. You should not be asked to pay for evaluation or to undertake a physical exam.

Make sure the life insurance settlement broker you have chosen is licensed. Check with the Better Business Bureau or your state attorney general's office if your broker is reputable.

Make sure you understand the life insurance settlements process, so you can make informed decisions whether to sell your policy or not. Make sure that settlement proceeds are credited to an escrow account in your name with a reputed financial institution, to ensure the transfer of the lump sum payment is safe.

You don’t need to worry about growing old. Life insurance settlements are here to help you live a comfortable and fruitful life, even in your twilight years.


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