With a life settlement, the owner of a life insurance policy will sell their policy to a third party, such as an investor, for more than its current cash value but less than its face value. There are many reasons why life settlement has become so popular for retirees over the past three to five years. Above all else, there may come a time when you no longer need or want life insurance coverage. Along with this, it is common for a retiree to find that they are no longer able to afford the premium.
Life Settlements and Retirement
With the ability to convert a life insurance policy into cash, many retirees are taking advantage of a life settlement. With this transaction, a lump sum is paid out to the policyholder within 30 to 60 days.
Even though life insurance is important to many, some retirees are in need of money now so they can continue living the life that they are accustomed to. Also, it is important to note that the money received from a life settlement can be tax deductible if used to pay for skilled nursing or assisted living.
Early in life, when your children are young, for example, having a life insurance policy makes a lot of sense. But as you get older and begin to live out your retirement, it is safe to say that your life insurance needs have changed. Rather than let your policy lapse, consider the money that you can receive from a life settlement.
Using a life settlement is a great way to receive money during retirement. Consider this option if you have a life insurance policy that you no longer want or need.