A life settlement can convert your life insurance policy into cash. More and more seniors are now opting for life settlements due to the benefits. If you are considering a life settlement, here are five things you must know about it.
1. You Can Sell Your Life Insurance Policy in Bundles
It is also possible to sell some benefits and retain some. For example, if you have a policy worth $2 million, and you only need to leave $700,000 to the beneficiary, you can sell the remaining $1.3 million and retain $0.7 million for your heir.
In addition to this, the investor gets to enjoy the benefits of a policy only after the seller is no more. The investor will have to continue to make premium payments until that time.
This is why the seller’s age and life expectancy matter a lot when calculating the worth of a policy. The older you are, the more money you will get. Plus, you must be at least 65 years of age to sell your life insurance policy.
2. Shop Around and Find the Right Help
This is very important because different companies offer different rates. You should ideally go for a company that maximizes your benefit.
In addition to this, you must also take care of fees and commissions. Mason Finance can help you find the right company. Trying an advisor can be of great help when selling your life insurance policy.
3. Life Settlements is Not Only For Individuals
Contrary to popular belief, a life settlement is an option not only for individuals but for nonprofits and businesses as well.
The concept is simple. Businesses often buy life insurance for some key personnel. This insurance is not transferred to the person and remains the property of the business.
If the said individual retires or leaves the company, the business has the right to sell the policy and use the funds to pay retirement benefits or meet other expenses.
The case is quite similar in the case of nonprofits as well. They often receive such policies as a gift or donation from donors. While it’s a good gift, it can often put a lot of pressure on nonprofits who have to pay heavy premiums, which may not always be feasible – especially now that seniors are said to be living longer.
In such a situation, selling the policy appears to be the best idea. The money can be used to meet other expenses.
4. You Have to Be In Touch with the Company
Selling the policy doesn’t mean you can disappear. You must still be in touch with the company as they may need regular updates regarding your health.
In addition to this, you will also be required to submit medical documents when you opt for a life settlement.
5. It Benefits Everyone Involved
Selling a life insurance policy does not only benefit the holder but the insurance company as well. The seller gets cash and the company gets a chance to reconnect with old customers.
Visit Mason Finance to know more about life insurance or how it can benefit you.