Life Settlements
Life Settlements, the life insurance settlement option
People who need some of the benefits of the life insurance policy before they die, or who have life insurance policies that for whatever reason will otherwise lapse, should consider selling their life insurance policy by way of a “life settlement”. This allows people to get cash out of their life insurance policy, in an amount in excess of the policy’s cash value (if any), while they are still alive.
A life settlement is the sale of an insurance policy, for more than the insurance policy’s cash value, to an investor who keeps the policy alive until the person on whose life the policy is on dies. Often, life settlements involve insurance policies that are failing because they lack sufficient cash value to pay the annual insurance costs, and the policy would have expired anyhow. Sometimes they are term life insurance policies where the policy owner for whatever reason cannot make the necessary premium payments, or desires not to anymore. Essentially, the buyer purchases the policy (giving the selling owner immediate cash) and then resuscitates it or keeps it alive until somebody dies, and then policy finally pays out to the buyer who presumably will get his money back plus some investment yield.
Life settlements can be real saviors for people whose life insurance policies will expire if the status quo is maintained, and who cannot (or are unwilling) to put additional cash into the policy to keep it alive. Instead of the policy eventually becoming worthless, or being limited to the policy’s existing and perhaps low cash value, they instead get a nice, current cash settlement in excess of the policy’s cash value. As we will discuss below, insurance companies hate the life settlement industry because it means fewer policies that lapse before the death benefit it paid, thereby reducing the life insurance companies’ profitability that traditionally anticipates high lapse rates. Insurance companies would instead prefer (greatly prefer) that the policy owners simply surrendered their policies for the cash value of the policies, thus creating a windfall for them since the amounts paid during the life of the policy for “death benefits” turned out to be free money to the insurance companies.
A life settlement means that the current policy owner will receive money for selling their policy, and the policy owner is not required to put up any cash or make any kind of investment. The current policy owner receives, very simply, a large lump sum of cash for selling the policy, and thereafter had no further financial obligations. Life settlements is an easy option for the policy holder to acquire additional funds.
RTG Consultants is dedicated to offering seniors viable options for their life insurance policies through life settlements. A life settlement, simply put, is the sale of a life insurance policy at a price, which is higher than the cash surrender value. Many seniors are realizing the extraordinary benefits of unlocking the dormant asset value of life insurance, allowing them to better plan for their future through what is essentially found money.
If you have any more question please don't hesitate to contact us or view or frequently asked questions about life settlements.
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