UNDERSTANDING LIFE SETTLEMENTS
Life settlements offer a practical alternative for seniors willing to trade their life insurance coverage policy for immediate cash. A life settlement is the sale of an existing life insurance policy contract for one-time payment. It allows customers to access the fair market price of their life insurance coverage by selling their policy and receiving payments for more than the surrender value. Through a life settlement agreement, you can sell your insurance contract to a third party in exchange for a reduced sum of the face value. Life insurance coverage is classified as an asset like a vehicle, home, stocks, and bonds – all of which can be lawfully sold.
A life settlement allows you to use your money today from an asset that’s usually believed only to be advantageous upon death. Life settlement transactions are a great benefit to those who own a life insurance policy of large face value, Key-man coverage or corporate life insurance coverage. However, it also provides a solution for those individuals who have life insurance policies that are no longer needed.
HOW A LIFE SETTLEMENT WORKS
When a life settlement company buys a life insurance policy contract, it pays a portion of the policy face value. As a result, the life settlement company becomes the new beneficiary of the policy.
With a life settlement, an insured may get a significant amount of money in exchange for the insurance contract while they are still alive. This can assist in retirement savings, long-term healthcare, or creating a nest egg for your family. If your life insurance premiums are becoming a burden, a life settlement could be the solution for obtaining a more financially secure future.