services
Life Settlements
A life settlement involves selling an existing life insurance policy to a third party—a person or an entity other than the company that issued the policy—for more than the policy’s cash surrender value, but less than the net death benefit.
Understanding Life Settlements
Selling Your Life Insurance Policy
A life settlement is the sale of a life insurance policy to a third party. The owner of a life insurance policy sells it for a cash payment that is less than the full amount of the death benefit. The buyer becomes the new owner and/or beneficiary of the life insurance policy, pays all future premiums and collects the full amount of the death benefit when the insured dies. People decide to sell their life insurance policies for many reasons. When an individual with a terminal or chronic illness sells his or her life insurance policy, that is known as a viatical settlement. When an individual who does not have a terminal or chronic illness sells a policy for other reasons, including changed needs of dependents, wanting to reduce premiums, and cash for meeting expenses, that is known as a life settlement.
How Do Life Settlements Work?
Why choose Richard S. Bernstein & Associates?
With so many options from which to choose, deciding on the life insurance policy that’s best for your needs can be a challenge. Our licensed professionals will provide you with a comprehensive needs analysis analyzing your needs, budget, and risk tolerance to determine the type of policy that’s right for you. Being in the insurance business since 1964, Richard S. Bernstein personally works to obtain the best underwriting offers for you with the best insurance carriers and will provide you with an array of options to meet your needs.
If you would like for one of our experienced life insurance advisors to examine your individual needs, offer our expert advice, and give you a quote, please fill out the box above to contact us today.
Factors to Consider When Deciding to Sell Your Life Insurance Policy
A life settlement might make sense for you if you no longer want or need your current policy—or if you can no longer afford the expense of paying insurance premiums and are willing to give up or replace the coverage. Here are some of the key factors you should consider:
- Outgoing Life Insurance Needs
- Impact on Your Finances
- Impact on Your Survivors
Financial Relief When You Need Cash
Life insurance is a way to support your loved ones financially after you die, but what few people realize is that a life insurance policy also is considered property. That means it can be sold. You can do so through a transaction called a life settlement.
A life settlement can be a way to get cash for a life insurance policy you no longer need or can no longer afford. For older adults who are struggling to pay for health care costs or long-term care in retirement, it can be a much-needed lifeline.
Who Qualifies for a Life Settlement?
Age and health of the insured person are the two key factors when it comes to selling a life insurance policy.
A life settlement can make sense if your need for cash is greater than your need for providing a life insurance payout to your current beneficiaries. Your kids might be grown and no longer count on support from you. You might have high medical costs associated with a terminal illness. Or you might need long-term care but don’t have another way to pay for it, such as a long-term care insurance policy.
Plus, if you can’t pay your life insurance bill, it can make sense to get market value for your policy by selling it rather than letting it lapse.
