LIFE INSURANCE SETTLEMENTS HELP YOU ENJOY YOUR SENIOR YEARS

2007-03-08 10:33:40

( Insurance )



Senior citizens beyond the age of 65 years old are resorting settling their life insurance policies with life settlement companies. Life insurance settlements are fast becoming a separate industry in the financial market. Banks and insurance companies are funding financial institutions and brokers to buy and sell life insurance policies for its cash value or face value.

Life settlement brokers sell the life insurance policies to as many purchasers as possible for the maximum price. Brokers identify what type of organization will buy certain types of life insurance policies. It also arrange for restructuring of certain life insurance policies to increase its marketability in the secondary market for life insurance. Individual, trust and company owned life insurance policies are purchased in the secondary market.

Life insurance settlements are usually paid in lump sum of cash. Individual or companies that purchased the life insurance will be continuing premium payments after completion of necessary documents.

Why would seniors sell their life insurance policies?

Seniors opt for life insurance settlements when they can’t afford to pay the current premiums of the life insurance. Some life insurance policy that is designed to self liquidate on premium payments might not be able to comply with this arrangement when interest rate and dividends for the policy is lower that what was projected when it was first purchases by the policy owner. As a result policy owners rather claim life insurance settlements than continue paying the premiums of the life insurance policy.

Receiving the lump sum cash now than wait for the life insurance policy to mature might be more useful for the policy holder. The lump sum of cash from the life insurance settlements can be invested to a higher earning investment instruments. It can also be used to purchase affordable life insurance. In the end the policy holder profits more from the sell of the life insurance policy with the higher value earned from the investment.

Seniors can use the lump sum cash payment as part of their retirement fund. They can use it to fund travels and health care. It can also be used to fund education of their children.


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