Life settlements is a booming market. By definition, a life settlement is an act of selling an existing life insurance to a third party, receiving payments larger than the cash surrender value, but lesser than the net death benefit. These payments have opted when there is a sudden cash crunch, and there is a need for cash. Various companies invest in this business and are known as Life settlement companies. These companies fund the finances behind the purchase of life insurance policies. These companies may invest their own capital or may raise the capital from various other investors by implementing certain policies in the market.
Life Settlements can be opt’d into when:
- When the client may no longer want his policy
- When the client wants to invest in a different kind of policy
- The policy is at the end of its coverage period
- In the case of the death of the person having the primary income in the family, where the whole insurance may become a burden.
- When the premium payments cannot be afforded by the client.
These transactions are advised and maintained by the Life Settlement Brokers. They are graded as per their services offered and the amount negotiated in the sale transaction. Various brokers have impressive portfolios based on this. Now need to be licensed by the state to carry out such deals. In addition to that, the insurance needs to be licensed by the state. This ensures that after the sale, the premium of the policy is paid by the beneficiary or the one who bought the insurance.
The benefits of selling the policy are huge. Some of them are:
- Carry out a better lifestyle with receiving a large amount than the cash surrender value.
- Relief from premium payment of the policy.
- Relief from unaffordable and unneeded life insurance policy.
- Have the peace of mind and dignity with significant funds to support retirement.
- The ability to redirect the cash transactions to something with more benefits and profit.
- To fund for long-term care and providing better medical facilities to the sick in the family.
Needless to say, if you don’t need a life insurance policy, don’t let it be a burden to you. Free yourself from the drudgery of premium payment. Opt for Life settlements.