Life Settlements

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Your life can change in an instant. In one day, you could win the lottery or lose everything. Whatever happens, you want to be prepared to handle it. Your life insurance policy is part of that plan, but sometimes circumstances change and you find yourself wanting that money sooner than expected.

In a world where most life insurance policies lapse before the death benefit is paid, settlements offer new options for making the most of your current life insurance policy. A licensed life settlement broker like Settlement Benefits Association knows how to navigate the life insurance landscape and ensure you walk away with the most cash benefits. We serve a similar role to a real estate agent, representing your interests while using our expertise to get you a fair deal.

Today, we’ll help you decide whether a cash settlement for life insurance is the right choice for you by providing you with the basics you need to make an informed decision.

Do I Qualify?

What Is a Life Settlement?

In the most basic terms, a life settlement lets you turn a future asset into a current resource. To qualify for a life settlement, you must:

  • Be 65 years old or older.
  • Have a life insurance policy that’s at least two years old.
  • Have a death benefit of $100,000 or more.
  • Have a qualifying insurance policy ‚ÄĒ like a universal life, whole life, convertible term or second-to-die policy.

Earlier, we mentioned that our job at Settlement Benefits¬†Association¬†is similar to that of a real estate agent. This apt comparison was first noted in the 1911 Supreme Court case Grigsby v. Russell. This case determined that a life insurance policy is essentially one’s property. Therefore, it can be sold, traded and used as loan collateral. Through this logic, life settlements are completely legal.

By working with a life settlement company, you’re essentially selling your life insurance for a cash settlement. We will negotiate a deal with interested buyers to take on your policy. If they like what they see, you’ll get a cash amount based on what you’ve already contributed to the insurance. You’ll get the money you need to deal with current concerns, and the buyer will become the beneficiary of the original policy.

Should You Get a Life Settlement?

There are many situations in which getting a life settlement makes the most financial sense. We’ve seen people come to the decision for all sorts of reasons over the years we’ve been licensed life settlement brokers. Our goal is to give you the individualized attention you deserve so you can make the most out of your policy. Below are five of the most common reasons we advise people to get life settlement services.

If you can no longer afford to make payments on your policy, it will lapse after a certain time. When that happens, your insurance company can cancel your policy, keeping most of the funds you’ve contributed over the years without needing to pay out. With certain life insurance policies, you can receive what’s called a cash surrender value upon a lapse or cancellation.

Cash value is part of what you pay through your premiums. It’s the portion of your policy that builds interest over time. When you prematurely end your life insurance policy, your cash surrender value is equal to this amount minus any fees and surrender charges your insurer requires.

While your cash surrender value can provide a boost to your funds,¬†cashing out through a life settlement company can give you a payout that’s¬†7.8 times higher¬†than that value on average. In some cases, there is no cash surrender value for a lapsed policy. Trading in for a life settlement can be especially beneficial in these cases.

When your family or loved one faces hard times, cashing in your policy can offer relief. The money you get from your life settlement can pay for hospital bills, necessary treatments and medications, and even funeral expenses.

Saving for retirement is essential for those later years in life when you aren’t working. However, the amount you’ll need is unpredictable. The older you get, the more likely you are to need a supplemental income to maintain the lifestyle you’re used to.¬†

Your insurance policy can be the payout that keeps you comfortable throughout the rest of your life. Settlement Benefits Association will work with you to determine the best way to cash in your insurance policy. We can also work with your tax professional to figure out what will or won’t be taxed.

Sometimes circumstances change and you simply don’t need to pay for life insurance anymore. You may no longer need your policy if you:

  • Come into new wealth and assets.
  • No longer have any dependents.
  • Have dependents that are financially healthy.
  • Have another financial plan for end-of-life needs, like investments or bonds.

Many companies offer group life insurance policies to their employees. However, if you leave or change jobs, you may no longer qualify for this benefit. While it’s best to talk to your human resources department for the specifics of your policy, you’ll generally have three options:

  • Cancel or let your policy lapse:¬†You can leave your life insurance policy behind with the rest of your job and start fresh, though this is your least beneficial choice financially.
  • Convert your policy:¬†You may be able to roll your policy into the one at your next job or convert it to an individual policy. While an individual policy often has higher premium costs, it’s the best way to retain the entirety of your policy.
  • Take a payout or life settlement:¬†If you don’t want to transfer your policy or pay more for it, taking out a life settlement is a viable way to move forward.
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What’s the Difference Between Life Settlements and Viatical Settlements?

At Settlement Benefits Association, we primarily deal with life and viatical settlements. People come to us with all sorts of reasons to cash in on their life insurance policies. Part of our job is to direct them to the best type of settlement for their needs. One of the primary questions we answer in our discussions is the difference between the two options.

Life and viatical settlements are similar. The main difference is who each option serves:

  • Life settlements¬†allow anyone over 65 to exchange their policy for cash, even if they’re healthy and will likely live much longer.
  • Viatical settlements¬†are designed for people of any age who are terminally ill and likely to die soon.

Our Process for Life Settlements

Your path to a life settlement payout with Settlement Benefits¬†Association¬†can take as little as a month. In other cases, it may take upwards of five months. If you need money now, make sure you start the process as soon as possible.¬†With no costs or obligations, there’s no reason to delay.

While there are many factors involved with getting things in order, the basic process includes these steps:

  • Informal discussions:¬†If you’re interested in a life settlement, contact us. We’ll have a few informal discussions to determine whether the process is a good fit for your needs.
  • Review and formal¬†evaluation:¬†Next, we’ll appraise your policy value and take a look at personal information like medical records. Through our review, we can devise a thorough plan to maximize your policy’s value. Once we have a plan, we will¬†present your case to interested parties and¬†start¬†an auction. We have long-standing relationships¬†with funding groups around the country.
  • Contract order and delivery:¬†After we find the highest bidder, we’ll order a detailed contract from them. We’ll collect any outstanding items and have all parties sign your life settlement agreement. The beneficiary of your policy will change to the buyer, completing the transaction.

Once all parties are satisfied, we’ll deliver your cash settlement from escrow. Depending on the state you live in, you’ll have up to 15 days to change your mind and return the money for your original policy.

Partner With Settlement Benefits Association Today

Once you make your decision, Settlement Benefits¬†Association¬†is ready to help. We’ll handle your case with care and attention to detail, making sure you understand the potential benefits and risks of your contract clearly.

We take our fiduciary responsibility seriously, keeping your information private and staying up to date on our licensing for your comfort. When you need life settlement services, let the professional brokers on our team manage your policy. We offer free evaluations so you can see what your policy is worth at any time.

To get started with your appraisal, fill out our online form or contact us at 561-963-5101. You can also use our on-site calculator to see what we can get for your policy free of charge.

Frequently Asked Questions (FAQs)

Yes. There are new options for the insurance you bought, including selling your policy on the secondary market.

Yes, selling only some of the death benefit and retaining the rest for your beneficiaries is possible.

Yes, Life Settlements are legal. They are regulated on the state level, by the departments of insurance.

There are various alternatives to a Life Settlement, including:

  • Policy lapse through nonpayment of premiums.
  • Cash value loans against the policy.
  • Premium payment through dividends or policy cash value for owners who find payment challenging and want to keep their insurance in force.
  • Policy surrender for cash value minus the carrier’s surrender charges.

Settlement Benefits Association can help you review your options to find the best one for you.

A Life Settlement contract is the document buyers and sellers sign detailing their agreement terms. This contract typically includes information like the payment price and the allowable time for cancellation. Rules vary among states, but this time frame is generally about 15 days.

A Life Settlement fund is a specialized asset that invests primarily or solely in Life Settlements. These funds typically purchase many policies to diversify risk and maximize returns across the portfolio.

The primary risk of a Life Settlement is not working with a licensed, reputable, and experienced broker like Settlement Benefits Association. This risk includes the following:

  • Lower payouts
  • A lack of fiduciary duty that does not prioritize your best interests
  • Unprofessional service that leads to delays or inaccuracies

Calculate Your Life Settlement

Do I Qualify?

Fill out our free policy calculator today to see if you qualify and find out how much you can get for your policy.

Calculate Now

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