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Life Settlements

Institutional investors purchase (from you) your Term and Universal Life Insurance policies at amounts larger than the values that you would have received if you surrendered the policy.

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Investing in your well-being. Well, sort of.

“A life settlement is the legal sale of an existing life insurance policy for more than its cash surrender value, but less than its net death benefit. There are a number of reasons that a policy owner may choose to sell his or her life insurance policy:  The Term or Universal life policy may not be needed any longer, the premiums may not be affordable, the coverage may be ending soon or you might need cash to supplement your retirement”. These are all great reasons to consider a Life Settlement.

Whether a purchased policy is used upon death of the policy owner; or, as in Term insurance, it lapses on its own, any life insurance policy can be viewed as an investment that will eventually mature (and have to be paid).

Thus, if you’re a current owner of a life insurance policy that you no longer need, and the mortality tables indicate that the time you’re expected to keep living remains reasonable in the investor’s eyes, you can enjoy a hefty payout while the investor receives a worthwhile rate of return.

Figure that your children are grown and successfully owning their own incomes, and you’ve saved/invested sufficiently for retirement. Why keep paying premiums on your term or universal life policy? A Life-settlement provider acts as an investment company, and will buy your policy. You receive cash, and the provider takes over the payments on your behalf. While you enjoy spending your payout – whether for daily living, medical expenses, or whatever – the company now owns, in effect, a policy on you. Eventually, when you pass on, the
investment company receives the death benefits from the policy you sold to them.

In a bizarre twist, the closer you are to mortality (another words the more unhealthy you are) or the more your health has declined since the purchase of the policy, the bigger the payout you receive—I like to call it “reverse underwriting”.

Do You qualify for a Life Settlement? It’s easy to find out:

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