A Life Settlement is…
A life settlement is an investment in your future that puts money in your hands today. There are no restrictions on how you spend your life settlement. 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.
Choosing the right time to sell your policy can be a hard decision to make. Life settlements are the transfer of ownership, beneficiary, and all future premium to a third party investor in exchange for a cash settlement. This system provides more that the cash surrender value of whole and universal life policies, but functions no differently than a 1035 exchange.
A life settlement is an alternative option to surrendering a policy or letting it lapse by not paying premiums. Often a person no longer wants to maintain life insurance, even though it has monetary value.
A Life Settlement is a process wherein an insured person agrees to sell his or her unwanted insurance policy to another party for a cash lump sum, instead of returning it to the company where he acquired it. After making the payment, the purchasing party becomes the beneficiary of the policy. A life settlement is the sale of a life insurance policy by a senior for an amount greater than the cash surrender value. The proceeds are often used to purchase other financial products.
A life settlement is the sale of an asset, a taxable event. The tax specifics are up in the air in Congress and the courts. A Life Settlement is the sale of an existing life insurance policy by an individual who is typically 65 years of age or older.
Life settlements are not affected by fluctuations in the stock and bond markets, interest rates and business cycles but still provide the opportunity for exceptional returns on investment. Bloomberg states, in a black sheet analysis published March 31, 2006, “Life Settlements are the only asset that can be truly said to provide absolute returns”. Life settlements are becoming increasing popular as an exit strategy for seniors looking to shift or lapse their coverage.
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.
Life Settlements are increasingly being used by Senior Citizens to fund retirement, pay for long-term care, or just pay rising living expenses.
