Life settlements that are a transaction between a client and the settlement provider are also known as a senior life settlement. Usually, the agent will serve as the middleman and regulates the transaction between the buyer and seller. Once the sale is done, the buyer will become the new owner of the policy and they will be responsible for the payment as well as the death benefits of the insurance plan.
So, the buyers will hope to make a profit once you sell your life insurance plan. Usually, life insurance owners will agree on the fact that it’s better to receive cash now than waiting for the insured to pass away, especially if they don’t need the policy anymore.
Senior life settlements versus Viatical Settlements:
Most times, viatical statements are confused to be synonymous to senior life settlements. The viatical settlement is a type of settlement and the difference is listed below:
Viatical settlements:
They only take place if the person who is insured has a terminal illness and isn’t expected to live for more than two years or so. Policy owners usually sell their insurance for the cash and it will help them out with medical expenses.
Life settlements:
People over the age of 65 are considered to be qualified for a life settlement, they must have a whole, universal or convertible life insurance plan that includes a face value of $250,000; some companies will even accept a face value that goes as low as $100,000. Convertible stands for the life insurance plan that has an option to convert from term to permanent life insurance. The policy owner can have a long life expectancy and still go for a senior life settlement. The seller does not have to have a terminal illness to qualify for a viatical settlement.
Why should you go for a senior life settlement?
Many people want to sell their life insurance because they may need the cash to fulfill some expenses and pay off the debts that can’t be covered through their retirement funds. If you have received a cash value policy, you may have hoped that you could borrow against the cash value or even surrender it. If you want to sell your life insurance policy, then you will give up all your benefits in exchange for cash.
When it comes to life settlements, you will usually get the offer that is more than the surrender value but less than the face value; you will have to decide if the cash settlement will give you an advantage or will benefit your heirs after you pass away. If it doesn’t, then you can seriously start considering selling your insurance policy to help with the financial issue.
Do you need the cash?
People who enjoy a comfortable retirement plan won’t indulge you in how they got there. Having a retirement plan ready is a journey that you have to be prepared for from a young age. People enjoy a life expectancy of 75 years and right now, with technology and medical advancements, that life expectancy is increasing.
While living a long and fruitful life is the dream, you have to ensure that you’re happy financially as well. You wouldn’t want to be stressing about money when you just want to enjoy your retirement years. People take up life insurance policies so that they can leave some monetary benefits to their heirs after they pass away. However, when you find that the policy serves no use for you and is just an added expense, your first option will be to sell it off. Senior citizens will choose to sell their insurance policies so that they can use the money to pay off medical bills and hospital expenses, as well as any outstanding debts.
How do you know if a senior life settlement is the best option?
A survey that was conducted a few years ago found that senior citizens were more concerned about running out of money than of passing away. If you can’t predict the rising costs of housing, fuel, and food when you’re in your twenties, then you can’t predict thirty years in the future as well. You’re not alone when it comes to worrying about your retirement plan. Everyone worries about it but not everyone talks about it.
You should approach senior life settlement in a logical way, learn as much as you can about settlements and how it will help you in the long term. You should plan your finances according to how you will use them in the future if you’re unsure, then you can always enlist help from a professional financial adviser.
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