What is a Life Settlement?
August 8, 2008
Life settlements are very interesting and in fact many individuals are unaware of their existence. Life settlements are when a person chooses to sell their life insurance policy for a certain price to someone who is looking for an investment.
A life settlement is the sale of an existing life insurance policy to a life settlement provider. Life settlements are an option for policyholders who determine that their current policy is underperforming or is no longer needed due to changes in the owner’s financial or other circumstances. A life settlement is NOT the same as a viatical settlement. In a viatical settlement the insured is ill and has a terminal diagnosis.
A Life Settlement is the sale of an existing life insurance policy by an individual who is typically 65 years of age or older. All things change with time, including your life insurance coverage needs. A life settlement is the sale of your life insurance policy for more than the surrender value of your policy.
A Life Settlement is a powerful new tool that allows you to help your clients maximize the full potential of their life insurance policies. A life settlement is an alternative option to surrendering a policy or letting it lapse by not paying premiums. Often a person no longer wants to maintain life insurance, even though it has monetary value.
A life settlement is not a viatical. Viaticals are purchases of policies of the terminally ill with a life expectancy of two years or less.
Life settlements are not affected by fluctuations in the stock and bond markets, interest rates and business cycles but still provide the opportunity for exceptional returns on investment. Bloomberg states, in a black sheet analysis published March 31, 2006, “Life Settlements are the only asset that can be truly said to provide absolute returns”. Life settlements are becoming increasing popular as an exit strategy for seniors looking to shift or lapse their coverage.
A Life Settlement is the sale of a life insurance policy for an amount greater than the cash surrender value, but less than the face value. A Life Settlement lets you convert a non-performing, illiquid asset into cash or another financial product that is more suited for your present stage of life.
A life settlement is the sale of a life insurance policy to an institutional investor for a cash payment that is greater than the policy’s cash surrender value. The platform for the life settlement industry was created in 1911 by virtue of Grigsby v. Russell
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