Life Settlement Situations

Several changes in your life could cause you to consider a life settlement. Estate tax law revisions might mean your heirs no longer face a hefty tax bill at your death. Perhaps your universal life premiums have become too expensive for you, or maybe you no longer have to worry about replacing your income.

In these situations, you have several options. You can view your policy as an investment and keep it. You may be able to lower your amount of coverage. You can let it lapse or surrender it for its cash surrender value. But sometimes a life settlement is a better solution.

For instance, because of estate tax law changes, a lady in her late eighties no longer needed her universal life insurance policy. She didn’t want to keep paying the premiums on her $600,000 policy. Instead of canceling the policy for the $518 cash surrender value, she sold it instead for $80,000.

A recently-retired gentleman had a universal life policy for $1,000,000. He became very ill and was having trouble paying his medical bills. He passed on the $2,128 cash surrender value and collected just over $100,000 through a life settlement instead. This allowed him to pay for the medical care he desperately needed.

Keep in mind, though, that these people received far less than if they held the policy until death.

Have your adviser show you offers from several companies. You will want to know the gross offer, the commission and the net amount you will receive. An adviser may recommend a company based on which pays them more, not you.

Beware of advisers who approach you about life settlements. In this case, it’s far better to be the pursuer than the pursued.

There is a big difference between selling your policy and buying someone else’s policy as an investment. I don’t believe any small investor should buy someone else’s life insurance policy as an investment. These were sold as ‘viaticals’ over the last several years and many took the bait to their regret. Don’t buy a viatical!

Life settlements aren’t for everyone. You need to make sure your life insurance needs are properly met and you’ve carefully considered all the pros and cons before making your decision. But in some circumstances, a life settlement can be a wonderful way to dip into the pot of gold sitting in your life insurance policy.

If have any questions or would like to speak with a Life Settlement Specialist please call 1-888-973-8377. It is now very easy to find out what your life insurance policy is worth and if that amount will benefit your financial needs. There is no cost or obligation in obtaining a life settlement quote or evaluation.