Seniors Turn to Life Settlements For Money

Written By: Kelly Ramirez on April 25, 2010 No Comment

With uncertainty in the economy, seniors are looking to non traditional sources of money for their retirement years. A growing number of seniors are turning to the novel life settlement market for cash. While many don’t know life settlements are available, they offer large and readily accessible sums of money from unwanted or unneeded life insurance policies.

Life insurance policies are usually purchased to provide much needed financial security in the event of someone’s death. When a life insurance policy is no longer needed many people mistakenly assume the policy has little or no value. In years past policy owners had two options for their unwanted life insurance. First, they could stop paying premiums, which then allowed the policy to lapse. In this scenario, the policy owner gets nothing. Secondly, some life insurance allows for the policy to be returned to the insurance carrier for the “cash surrender value”. Unfortunately, the cash surrender value is often only a nominal amount of the policy’s death benefit.

With the advent of the life settlement market, policy holders now have a 3rd option. A policy holder can sell their life insurance policy in a life settlement for an immediate lump sum payment. The buyers, which are usually banks, hedge funds and other financial institutions, often pay sellers as much as 200%-500% more than the cash surrender value. The buyers take over the premium payments and the policy seller has no further obligation.

Unfortunately, many seniors don’t realize that life insurance policies can be bought and sold by their owner, like any other asset. The right to sell a life insurance policy has even been upheld by the U.S. Supreme Court. In fact, life insurance policies have been sold in the USA dating back to the 1800′s.

Contacting a life settlement broker is usually the first step of the life settlement process. The life settlement broker can provide a free estimate and negotiate offers with potential financial institutions interested in buying life insurance policies. The life settlement brokers usually require an application and then they will collect the other medical records and insurance documentation on their own to get the process started.

Looking to find the best deal for your life insurance policy in a life settlement, then visit www.amritafinancial.com to find the best advice on working with a life settlement broker.