LIFE INSURANCE SETTLEMENTS: STEPS ON HOW TO SET UP

2007-03-08 10:33:40

( Financial )



Life insurance settlements originate from viatical settlements. Viatical settlements historically involved policy holders who sold their life insurance policies. They usually have a life expectancy of two years and are suffering from AIDS Virus. Many of those who bought the viaticals of these policy holders suffered with the emergence of drugs prolonging the life of patients suffering from AIDS Virus.Also, many scams were committed. So an organization of insurance commissioners set up rules to regulate the selling and buying of life insurance policies of terminally ill policy holders. It started the market for life insurance settlements.

The regulation of life insurance settlements industry increased the number of buyers and sellers in the market. Many buyers increased their investment portfolio on life insurance settlements and aggressively look for markets to buy and sell. Major research companies provided positive outlook on the industry resulting to higher market movement. Senior citizens were attracted to the positive reviews that many are selling their life insurance policies to enjoy the cash benefits earlier than its maturity.

Senior citizens ages 65 years old and above must become aware of the processes involved in the transaction of life insurance settlements. First, they must review their financial needs and determine if their needs warrant for them to sell their life insurance policies. If they decide to sell, they must consult a financial advisor to guide them on the basic tenets in life insurance settlement and the realities that they have to be aware of when they sell it.

Senior citizen will now look for a broker to negotiate the sell of his life insurance policy and help him negotiate a good price for it. The broker will request medical information from the policy holder and submit it to various settlement providers along with the facts of the life insurance policy. The settlement providers will offer a price to the policy when it meets the necessary criteria it set.

The broker will present the price offer of the settlement provider to the policy holder. A closing package will be set up after the policy holder accepts the price offer. An escrow account will be provided for the policy holder which will hold all cash payment for the life insurance settlement. After verification of proper documents, the funds will be released to the policy holder.

Policy holders should try to consider various price offers from settlement providers before agreeing to finally sell the life insurance policy. It is best that you get the most cash from the sell of your life insurance policy.


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