The Benefits of Life Insurance Settlements

2007-03-08 10:33:40

( Insurance )



What are Life Insurance Settlements?

Life insurance settlements come about when a policy owner sells his or her policy to the appropriate company for a sum of money. Life settlements liquidize non-performing assets. Policy owners over 65 years old can avail of this option; especially if their life insurance policies are currently not useful for them. It is also a viable alternative when they can no longer afford to pay the premiums. (If you have low cost life insurance, life insurance settlements may not be necessary.)

Life insurance settlements are also known as lifetime settlements and senior settlements. Before lifetime settlements were conceptualized, senior citizens had fewer options available to them, should they feel that they were no longer benefiting from their policies. All they could do was to cash in their policies for the stated cash surrender value. Life settlements now give senior citizens more altitude with their finances. Life settlements allow policy owners to sell his or her policy at a higher price, especially when compared to the cash surrender value. These days, policy owners are free to shop around and find the best price being offered for their policy; these prices are almost always higher than cash surrender values.

What are the Benefits of Life Insurance Settlements?

Life insurance settlements provide you with certain benefits, such as:

Higher cash payment compared to the cash surrender value. Life insurance settlements allow you to get considerably higher prices for the exchange of your policy than is otherwise available.

Additional funds. Because you are able to get more money for your policy, you will have better free cash flow, which you can apply to a variety of expenses, such as medical care.

Eliminating the need for paying premiums. Because you are selling your insurance policy, you will no longer need to pay your monthly premiums. Monthly premiums can be a source of financial strain, especially if there are no regular sources of income. A life settlement relives you from such strain. Again, if you have discounted life insurance or low cost life insurance, then paying the premiums may not be a problem.

Acquire a profit from an otherwise non-performing asset. If you have received little benefit from your policy, it could be time to sell it. By doing so, you should receive an amount above and beyond what you have paid in premiums. Count this as profit; find alternative avenues for investment.

In sum, life insurance settlements allow you to benefit from your existing policies. If you feel that you are not getting your money’s worth from your insurance policies, then consider acquiring life insurance settlements.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.