Male   Female
  • What are life settlements?
  • December 10, 2013
  • By LifeQuotes.com

    The practice of buying a person’s life insurance policy, also known as life settlements, became extremely popular during the 1980s when the AIDS epidemic erupted. As those afflicted with the deadly disease found it difficult to pay off medical expenses, investors swept in to buy their insurance policies.

    The way life settlement works is that the investor agrees to pay the premiums on a policy while the initial policy holder gets a cash payment. The reward for investors is the payout associated with the death of the insured person.

    In recent years, life settlement has become popular with older adults who may not want to pay for life insurance premiums on policies that will end up being useless.

    According to the Life Insurance Settlement Association (LISA), many American seniors – typically those 70 years of age or older – are discovering that life insurance policies that once seemed appropriate, no longer meet their needs.

    Life settlements are sold for more than their cash surrender value but less than their net death benefit. They can be an important option for those who may have thought that they had no options at all.

    Rather than continuing to pay premiums on a policy that no longer serves its original purpose, life settlements offer consumers payoffs that can be significantly greater than surrendering a policy. They offer a reasonable and profitable exit strategy that addresses the financial objective of policyholders.

    According to recognized analyst on life insurance products, Tony Steur, state laws and insurance regulations need to be considered before selling a policy. If terminally ill, a viatical settlement is the best choice and may offer different options than just a life settlement. There may also be tax implications since not all proceeds may be tax free.

    Therefore, it is advised to contact your financial adviser before making decisions about your life insurance policy.

  • Category: Articles Library, Life Insurance, Tips

Leave a Reply

Archives

About

Consumer Insurance Guide SM provides a wide selection of originally-authored articles and expert advice targeted to the self-directed insurance shopper. Our mission is to provide consumers with useful, money-saving information on all things having to do with making sound insurance purchase decisions.

Consumer Insurance Guide SM is owned by Life Quotes, Inc. 8205 South Cass Avenue, Darien, IL. For editorial, content feeds, advertising and lead purchase opportunities, contact Robert Bland at bob@lifequotes.com.

Originally founded in 1984 as Quotesmith Corporation, Life Quotes, Inc. owns and operates www.consumerinsuranceguide.com and www.lifequotes.com, two online consumer insurance information services that cater to the needs of self-directed personal and corporate insurance shoppers.

About Us  |   Contact Us  |   Press Releases  |   The Best Privacy Policy  |   Life Insurance  |   Careers
For Agents & Brokers  |   Site Map  |  


Copyright ©1984-2015 Life Quotes, Inc., 8205 South Cass Avenue, Suite 102, Darien, Illinois. Life Quotes, Inc. and certain of its personnel are licensed as insurance agents, brokers or producers in all states. CA agent #0A13858, LA agent #200696, MA agent #333509159. dba Life Quotes Insurance Services in CA under agent #0827712, in LA under agent #205078. dba Life Quotes Insurance Services, Inc. in UT under agent #90093. All rights reserved. Telephone (630) 515-0170. Founded 1984.
10.1.1.86