A cash life insurance settlement is exactly what its name infers, a cash settlement for relinquishing your life insurance policy.
A cash life insurance settlement is exactly what its name infers, a cash settlement for relinquishing your life insurance policy.
Cash Life Insurance Settlement companies buy life insurance policies for a percentage of their worth. In essence the buyer becomes the beneficiary, and when the policyholder dies the buyer collects the full amount of the policy.
There are benefits to choosing cash life or similar types of settlements, especially if your life insurance policy is about to lapse, is no longer adequate for your needs, or rising premiums and decreasing benefits have rendered it virtually worthless.
Cash life companies tend to offer much more for policies than insurance companies give clients who surrender policies at the insurer’s estimated cash out value. Term life often has no cash value, but most other types of policies can be cashed out.
There are many different reasons why people choose cash life settlements, such as an emergency for which they need cash, extensive medical expenses not covered by regular health insurance, or the need to supplement their retirement benefits. Some accept “inheritance cash advances” because they want to give their money or a portion of it to their heirs now instead of waiting until they die, and some do so because they have chosen to disinherit someone or the beneficiary has died, or they want or need the money themselves. The seller of the policy will receive a healthy lump sum of cash, which can be used for anything, including buying better life insurance.
Though cash life is the more general, more widely recognized term there are differences in the types of settlements available. Cash Life programs are usually for people who are expected to live fourteen years or less who carry insurance with a value of at least one hundred thousand dollars.
Senior Settlement offers are applicable only to people over sixty five years of age, who are in some way infirm, and whose policy benefits exceed one hundred thousand dollars.
Viatical Settlements are designed for people with terminal illnesses, or those who are otherwise not expected to live for more than two years. A Viatical Settlement is the only variety that is not federally taxable under the Health Insurance Portability and Accountability Act (HIPAA). For other types of settlements, you will need to speak to an accountant or tax preparer to find out the particulars of your tax burden.
To learn how much money you could receive for selling your policy, you will need to contact one of the many cash life companies or brokers. There are several online and some even have graphs on their websites that show approximate figures.
Check out any company you consider using with the Better Business Bureau to make sure they are legitimate before giving them your information. As with many other types of businesses there are some in the cash settlement field looking for vulnerable people to scam, so make sure you choose a well known, reputable company or broker.
Settlement brokers work much like any other broker. You give them your information and they pass it along to others who then bid on your policy. You are under no obligation and you are free to accept or decline any offer.
Reputable companies have the experience and the contacts needed to handle most eventualities. Should you decide you don’t want to give up all your life insurance, they can set it up so you receive a lump sum of cash, while some of the proceeds of your policy are set aside for inheritances or final expenses. Or, perhaps you have more than one policy to sell.
Choosing any type of cash life insurance settlement can help improve the quality of your remaining years, but it is a personal decision that should be weighed and researched carefully.
Call 1.888.973.8377 to speak with one our consultants about our life settlement services and free appraisal.
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