Life Settlement Companies – Find One You Can Trust

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Life Settlement

At an early age, many people strive to pay for their life insurance plan.

But as the years go by, some plans fade in value and is no longer recognized as needed by the policyholder. In other cases, policyholders are unable to maintain regular payments due to loss of work.

Both scenarios may end up forfeiting your policy to your respective insurance provider for a lower compensation. Fortunately, there is another viable solution for this situation – selling your life insurance.

Life Insurance Settlement

It is indeed allowed and even encouraged by some to sell life insurance policies to a third-party purchaser. The process of trading life insurance is known as life insurance settlement.

The policyholder trades his/her plan in exchange for a lump sum payment that is lower than the original proceeds and death benefits but higher than the cash surrender value.

After a successful transaction, the policyholder receives full responsibility for the policy, which includes paying for it on a monthly basis.

The buyer also becomes the new beneficiary of the policy and will be able to claim the proceeds and death benefits after the policyholder’s death.

Life Settlement Options

There are numerous options to choose from when talking about life settlement.

You can opt for a lump sum payment, which is a common choice for seniors who are looking to invest on something big or just have a luxurious lifestyle to supplement.

Meanwhile, those without immediate financial needs can opt for an interest income payment plan. Below is a more detailed description of each:

Lump sum cash payment. This involves payments made in full immediately. After the policyholder’s death, it may be a few weeks or more prior the claim is paid to the beneficiary.

This includes the interest accrued on the face value during the insurance’s life cycle.

Interest income payment. If the insurance proceeds are not required immediately, the interest payment method is a suitable option.

The insurer keeps the cash and pays a small interest to the beneficiary.

Fixed period payment. The payment option involves paying principal and interest within a fixed time frame.

In the untimely death of the beneficiary in which case not all payments were received, the balance then becomes a portion of the beneficiary’s estate.

Benefits of Life Settlement

Transacting with life settlement companies can be tedious.

Nonetheless, it is a beneficial option for many seniors in the U.S. as well as for people who are thinking to sell their life insurance, to find the right life settlement company that would expedite this process and provide proper guidance.

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