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LIFE SETTLEMENT
Dont Cancel or Cash In
a Life Insurance Policy Until You See What a Life Settlement Can Give
You!
By Terry M
Rose
HRS Inc.,
www.settlementlife.com
Feb. 23, 2004 - Every year, thousands of
life insurance policies are allowed to lapse or are dropped, especially
by senior citizens. In the case of a dropped term life insurance
policy, the owner of the policy receives nothing and the years of
premium payments are gone. If a permanent life insurance policy such as
a universal or a whole life policy is dropped, the owner receives the
cash value of the policy.
There is a much better alternative for
anyone who is thinking about dropping a life insurance policy they no
longer need or want. Those policies can be sold through a Life
Settlement arrangement. A Life settlement may provide the owner with
significantly more money than the cash value, or in the case of a term
policy, the owner can receive a sizable cash payment whereas they would
receive nothing if they simply canceled the policy.
A Life Settlement is the sale of an
existing life insurance policy by its owner to a third party. In return
for a cash settlement, the policyholder transfers ownership and all
other rights of the policy to that third party. This enables the owner
to receive cash for a life insurance policy that is no longer needed or
cost effective. The owner who sells a life insurance policy is no
longer obligated to pay any premiums.
Almost any kind of individual life
insurance policy may be eligible for a life settlement, including term
life, whole life, universal life, and life insurance policies purchased
as part of a business arrangement. The companies that purchase life
insurance policies are major financial institutions, both national and
multi-national corporations.
Why Sell a Life Insurance Policy
There are many reasons for why one would
consider eliminating a life insurance policy. The reasons include but
are not limited to: Premiums have become too expensive (this can be
especially true for term policies that are due for renewal), policies
are no longer needed because family or estate planning needs have
changed, policies whose cash value has begun to disappear as can happen
with universal life insurance, policy owners who wish to eliminate a
large expensive individual life insurance policy and replace it with a
less expensive survivorship policy or smaller policy, policies are
cashed in to fund financial needs such as retirement, other investments,
of long term care. In addition policies purchased by businesses for
executives, key person policies, or policies that are part of buy/sell
agreements that are no longer needed are good Life Settlement
candidates.
Also families who are faced with the
prospect of a family member needing long term care can consider selling
a life insurance policy through a Life Settlement in order to fund long
term care or assisted living care. If a family feels that a family
member will eventually be relying on Medicaid to pay for long term care,
Medicaid will require that large life insurance policies be eliminated
or cashed in before the individual will qualify for Medicaid coverage.
The bottom line is that if you have a
life insurance policy that you are going to drop or cash in anyway, you
might as well evaluate the possibility of a life settlement for the
policy. The evaluation costs nothing and you could receive a
tremendously higher cash payment.
Eligibility
Virtually any type of life insurance
policy is potentially eligible for a Life Settlement. The insured
individual should be 65 or older to make a Life Settlement offer more
likely. Life insurance policies held by younger people will not be as
likely to qualify for a Life Settlement unless the policy is
exceptionally large or the insured individual has some health problems.
Policies with a face value as little as $25,000 can qualify for a Life
Settlement.
The Process
The process of getting Life Settlement
bids is actually quite simple. To begin with, a brief phone
conversation or email during which minimal information about the life
insurance policy and the insured person is requested, will be sufficient
to get a preliminary answer as to whether it is worth going forward with
a full evaluation of a policy. If we decide to go forward and seek Life
Settlement bids, a simple application, a copy of the insurance policy
and a release for medical and insurance company information is all that
is required.
I work with companies who evaluate the
information submitted and present it to financial institutions who fund
Life Settlements. Hopefully we will receive multiple bids to choose
from. If you decide to accept a Life Settlement, you receive a large
cash payment and the ownership of the life insurance policy is
transferred to the purchaser. After a Life Settlement is completed you
have at least 15 days to change your mind and reverse the transaction.
Evaluating a life insurance policy for
Life Settlement cost you nothing and you can stop the process at any
time.
Summary
Life insurance policies are like any
other asset that you own, which means you may be able to sell it. If
you have life insurance policies that you no longer want or need or
that you can no longer afford consider evaluating a Life Settlement.
The evaluation costs nothing and you might receive significantly more
money than you otherwise would. If you are going to eliminate a life
insurance policy anyway, it only makes sense to at least look at a Life
Settlement.
Terry M Rose
HRS Inc
Washington, MO
888-733-4088
www.settlementlife.com
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