If you are interested in a life settlement transaction it is important to learn as much as you can. As long as you start with the basics, everything should be clear as you decide whether or not this right for you.
At some point in your life, after the age of 65, you should consider the benefits of selling your life insurance policy as opposed to holding onto it. The average life settlement provides roughly 15 percent of the policy’s face value. With this, the policy owner receives cash and the buyer takes over the payments.
There are many reasons why life settlement is becoming more and more popular:
- The cost of life insurance is too much to handle in retirement.
- A term policy has matured.
- The beneficiary of the policy passes away before the owner.
- To pay for healthcare.
- To have more money during retirement.
While all of this information is important, most people have one thing on their mind: how much money am I going to receive from my life settlement? It would be nice if there was a “set” answer to this question, but this is not the case.
Your life settlement is based on many factors including: the face value of your policy, premium, cash surrender value of the policy, the type of policy (term, whole, universal, etc.), your health, and your age.
Life expectancy is the biggest factor in determining how much money is offered for the policy. Buyers have different needs, and all of them have the right to interpret the deal however they best see fit.
Are you now more interested in selling your policy? If so, you need to do what you can to get the best deal possible. One way that you can do this is by hiring an experienced life settlement broker. A quality broker will shop your policy around to numerous investors, helping you to get the best deal in the end. Did you know that most investors only deal through life settlement brokers as they are not equipped to handle direct deals with policy holders?
Some of the basic requirements for a life settlement transaction include:
- 65 years of age or older.
- $100k minimum face value
- Active policy for at least two years
- Low cash surrender value
- One of the following types of policies: term, universal, whole, variable life, survivorship, joint first to die, or adjustable life.
These life settlement basics should give you a better idea of what this transaction entails, the benefits of selling, and how to get started if you are interested. Although life settlement is not the right choice for every policyholder, it is something to consider if you have an eligible policy.