10 Reasons To Consider A Life Settlement

I was recently asked to sit down with the parents of a close friend. The purpose of this meeting was to provide them with some guidance regarding their retirement. As it turned out, all they wanted to hear were five reasons why I would consider a Life Settlement. As an advisor and family friend (and a bit of a windbag), I shared ten.

I started by telling them that many people purchase life insurance initially for the right reasons. Life insurance is usually purchased for planning needs that may span a time horizon of as few as five or as many as 50 years, depending on the long term insurance need that is best met by permanent life insurance. However, after years of funding the policy, their need for life insurance or their health status may have changed. These are my first two reasons for considering a Life Settlement.

The third reason is if your personal financial situation has taken a turn for the worse and thus making premium payments have become a challenge. In this situation, many policy owners decide to allow their policies to lapse as they didn’t realize a Life Settlement is possible.  This is a potentially costly decision that can be avoided via a Life Settlement transaction, which provides immediate cash influx to help pay for essential expenses and improve your life-style.

The fourth reason to consider a Life Settlement is if you are a policy holder over the age of 60; a Life settlement will increase your current assets by eliminating premiums and getting you the necessary funds that can be used today. In this situation, a Life Settlement creates immediate liquidity from a non-performing asset, allowing you to cash out of an unwanted and/or unaffordable life insurance policy thereby providing you with a better retirement.

Reason number five is if you wish to distribute the funds/ liquid assets of your policy as per your desire while living. For instance, you may want to assess your children’s and/or grandchildren’s needs, wants, and desires and then allocate the funds as you see fit. This way you can sit back and witness the joy your distributions bring them while you’re still alive.

Reason number six is if you wish to make funds available for other investments, such as a lower cost survivor policy; single premium annuity for supplemental income; long term care insurance; or other asset protection tools. Or perhaps you would like to invest in more risky yet lucrative investments such as real-estate, stocks, bonds or a new business.

In order to do this, you must be aware of the flexibility and liquidity of your insurance policy, which can be sold for cash. Realizing that a Life Insurance Policy is a personal property, like a house, car, antiques, old painting or stocks and bonds, you can sell your policy like you sell your other personal property items.

This brings us to reason number seven, which is when the sale proceeds from your Life settlements are needed to pay down loans or outstanding debts. Life settlements present a unique opportunity for you to receive the maximum possible value from your existing life insurance policy and utilize those funds for your  existing financial needs. Many people choose this option because the cash value of a life settlement generally exceeds the surrender value that would have been paid by the life insurance policy.

Reason number eight to consider a Life Settlement is if your policy was purchased to ensure the availability of funds to pay off a mortgage and the mortgage has been paid.

Another great reason to take advantage of a Life Settlement is if you want to take that long awaited vacation or to buy that luxury item that was never affordable. A Life Settlement provides you with the cash to do either or both, thereby allowing you to live your life to the fullest.

Finally, reason number ten is if you would like to donate to your favorite charity or cause while you are still living because you want to feel better about yourself knowing that you have done your part to make the world a better place. A good thing to keep in mind is that, oftentimes, proceeds of a Life Settlement could result in a larger gift to the charities of your choice than the policy itself upon your demise.

There you have it, my ten reasons to consider a Life Settlement. The bottom line is this, with time your life insurance needs will change. And when they do, a Life Settlement becomes the more lucrative alternative to allowing your policy to lapse or surrendering it to the issuing insurance company. So, if you are considering lapsing or surrendering your life insurance policy for any reason, you should always explore your life settlement option with a financial advisor, first.