Insurance Center

Nov 04,2008

When a life insurance policy is sold to a third party, it is called a Life Settlement. The life settlement industry is an industry that is rapidly growing, has grown over the last ten years and will continue to grow into the future. Before, when a life insurance policy owner wanted to get rid of their policy, all that they could do was to cancel the policy and receive a lump sum-the cash surrender value of the policy. Today you have other options when settling your policy.

For older people, life settlements represent a exceptional opportunity by allowing them to re-sell their life insurance policy for a sum that exceeds the cash surrender value. From the time a life insurance policy is purchased the circumstances change. In fact it is even possible that the policy may become unnecessary or even undesirable.

People who own life insurance policies have various reasons for wanting to give them up. For one thing, the premiums may become too costly. Another possible reason is that they may have new economic obligations that they did not have when they initially bought the policy, or they may simply wish to enjoy their wealth during their own lifetime.

The first thing to do when dealing with life insurance settlements is to assess the value of your policy. It is a simple process to find out the value of your policy. What you need to do is to complete an application that includes medical and policy information release forms. No physical is required. This information is then sent by the broker to another company to formulate the other numbers that are needed. Then, in order to get bids on the policy, the information is compiled and sent to various perspective buyers.

Once you sell you life insurance policy, the new buyer takes his/her ownership of the policy. You then receive a lump sum payment, and are able to do whatever you want with it. Your life insurance policy is no longer your responsibility. It is now up to the buyer to pay the future policy premiums and to collect the death benefits when the original policyholder dies.

FAQ's with regard to life settlements

• How much should I expect to receive from my policy?
Various factors are used to determine the amount that you will receive for your policy. The main factors include: policy size, type of policy, age, health of the client, as well as size of premiums.

• Who is now responsible for paying the remaining premiums?
Once you have sold your life insurance policy, the premiums are no longer your responsibility. At this point it is the buyer of your policy who takes over the responsibility of paying the premiums.

• Is there a limit as regards the size of the policy that I can sell.?
No. There are no limitations regarding the size of the policy.

• Are there any restrictions as regards the payout from a Life Settlement?
No. No restrictions apply. You can choose any way you want to pay out Life settlements.