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 a product for seniors (generally over the age of 70) who are seeking an economically sensible exit strategy from unwanted life insurance policies. A life settlement transaction involves the sale of an existing life insurance policy, typically valued at $250,000 or more, to an institutional investor (known as a provider) in exchange for a lump-sum payment greater than the cash surrender value, but less than the death benefit.
Life Settlements are senior life insurance policies that have been sold by the insured parties for cash, often to pay medical expenses or living expenses. Private investors and institutions have been investing in life settlements for about 10 years.
Life settlements are similar to viatical settlements in that a third party purchases a life insurance policy from the policyowner at a discount and holds it to maturity. However, the target market, distribution channel and motivation to sell the policy are completely different. Life settlements are a 'win-win' transaction for both the insured seller and the purchaser. Owning a life settlement is an easy process for the purchaser and simply becomes a short term buy and hold to maturity type of vehicle similar to a Certificate of Deposit (CD).
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.
A life settlement is a transaction in which an insured person sells a life insurance policy to a third party, receiving a fraction of the death benefit of the policy. The buyer pays the premiums on the policy and collects the benefit when the person dies.
A life settlement is when a person insured by a life insurance policy sells his policy to a third party, often an investment company. The investment company pays a percentage of the policy's value in a lump sum cash transaction.
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
About the Author:
Ben is a noted author and advocate for Senior Citizens. He specializes in consulting on the subject of Life Settlements and in how to obtain cash for your life insurance Don't reprint this exact article. Instead, reprint a free unique content version of this same article.
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