Who Is an Ideal Life Settlement Candidate?

May 8, 2024 | By Adam Lippman

Who Is an Ideal Life Settlement Candidate?

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An ideal Life Settlement candidate is someone over 65 with a life insurance policy valued at $100,000 or more. In addition, the insured may have had a change in health or circumstances, and may no longer want to pay life insurance premiums. 

Life Settlement Requirements

Many older adults may be suitable candidates for Life Settlement, but there are local and state laws that the insured must adhere to. Besides the Life Settlement age requirements, there are a few other qualifying criteria:

  • Policy type:¬†Only some policies are eligible for sale. Most third-party buyers prefer convertible, whole, or universal life insurance policies.
  • Policy value:¬†The insured’s death benefit must be over $100,000.
  • Policy age:¬†The policy must be over two years old. This term varies by state. Some states require a waiting period of five years.
  • Policy owner’s health:¬†If a policy owner’s life expectancy is lower due to a terminal illness, there may be higher interest in buying the policy due to the perceived return on investment.¬†

If the insured has a terminal illness, they may qualify for Viatical Settlement, which can assist the policy owners in paying medical bills, settling debt, and enhancing quality of life. 

Settlement Options for Life Insurance Policies

Various settlement options exist for life insurance policies:

  • Life Settlement:¬†These settlements are the most common options. Typically, the insured is over 65 and initiates¬†the Life Settlement¬†to get a cash payout or cash and coverage with no more premiums. This option allows the insured to eliminate the burden of monthly premiums.¬†
  • Viatical Settlement:¬†Viatical Settlements are¬†for terminally ill policy owners. These settlements work like Life Settlements but may have a higher payout percentage due to the decreased life expectancy of the insured.¬†
  • Retained Death Benefit:¬†Another settlement option is Retained Death Benefit. Under this option, the policy owner maintains a portion of the life insurance policy’s death benefit without paying monthly premiums. This settlement option may be suitable for policy owners who still want their beneficiaries to receive the death benefit and do not want to pay monthly premiums anymore.

Get Assistance With Your Life Insurance Policy

Your life insurance policy may no longer be necessary due to a change in circumstances. Instead of surrendering the policy, consider Life Settlement options. 

Working with Settlement Benefits Association will help you get answers to your questions and secure the maximum return on investment. We have two-plus decades of experience, provide advanced tools, and are approved by the Life Insurance Settlement Association (LISA).

Contact us online to learn more or check your eligibility with the Visual Valuator. 

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