Life Settlements: A Viable Option For Today's Seniors

Life Settlements: A Viable Option For Today's Seniors

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Life settlements can be a viable choice for seniors ready to swap their life insurance plan for immediate cash. A life settlement is the purchase of a present life insurance policy for a lump sum of money. It helps policyholders to get the fair market value of the own life insurance by selling their coverages and getting payments higher than the cash surrender value.

Technically, a viatical calculator lets you sell your insurance policy to another party in exchange for a lesser amount of their face value. That is possible since a life insurance plan is really real estate, like a car, house, stocks and bonds that can be legally sold. A life settlement basically enables you to extract value today from an asset that’s usually thought to only have an advantage if you die. Typically, life settlement transactions demand life insurance policies of a massive face amount; “key-person” coverage or corporate-owned life insurance policies or policies representing surplus coverage that’s no more needed.

Here is how a lifetime settlement functions: If a life settlement company purchases your life insurance plan, it pays you a proportion of their policy’s face value. Afterward the life settlement company becomes the new beneficiary of this policy at maturation. Therefore, it’s accountable for all paying all future premiums and collects the whole death benefit once the insured dies.

A Growing Industry

With a life settlement, you can be given a significant amount of cash in exchange for your insurance coverage as you’re still living. This removes premium payments, highlighting the shifting demands of your dependents and provides greater financial flexibility.

Life settlements may also be utilized for charitable giving. Sophisticated real estate and tax planning approaches can employ when utilizing life settlements at a planned giving program. But here is how this functions in most straightforward terms: You give your life insurance coverage to a charitable organization, which immediately sells the policy for a lump sum of cash by means of a lifetime settlement.

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