What Is a Life Settlement?

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A¬†Life Settlement allows you to sell your¬†life insurance¬†policy to a third party for a one-time lump sum payment. You can use this money for anything you want, such as medical bills or travel expenses.¬†This sale of a life insurance policy will be in excess of the policy’s cash surrender value¬†‚ÄĒ¬†even if none exists.¬†With a Life Settlement, you can remove the burden of expensive insurance premium payments and receive a lump sum cash settlement.

At Settlement Benefits Association, we specialize in understanding Life Settlements and how they may benefit policy owners and their loved ones. Our team of professionals is always ready to discuss life insurance settlement options and help you through every step, from policy evaluation to cash disbursement.

What is a Life Settlement? 

Settlement Options for Life Insurance

If you are considering selling your life insurance policy, there are two settlement options available:

Life Settlement

Life Settlements allow older adults who have paid on their insurance policies for some time to sell their qualifying policy.

Viatical Settlement

Viatical Settlements help terminally ill individuals sell their policies for cash. Often, people use this settlement to cover medical expenses.

Each of these settlement options comes with different requirements, so it is important to understand the eligibility requirements.

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Life Settlement Requirements

To qualify for a Life Settlement, you must:

  • Be 65 years of age or older.
  • Have a qualifying policy worth $100,000 or more.

To meet the qualifications for a Viatical Settlement, the policy owner must be chronically or terminally ill, as determined by a doctor.

You can be in very good health to qualify for a Life Settlement. Often, people who are ill receive a better settlement because the buyer has a better chance of collecting their benefit early.

Keep in mind that your state may have additional requirements. For example, most states have a mandatory payment period between two and five years. This means you have the policy in force for that long before you can qualify for a Life Settlement.

Our Life Settlement Process

Whatever your reason for wanting to sell your life insurance policy, Settlement Benefits Association can help. The Life Settlement process involves the following steps:

Why Explore Life Insurance Settlement Options?

When you take out a life insurance policy, you are setting yourself up for the future. But circumstances can change, and sometimes that means your life insurance policy is no longer as beneficial as it once was. There are many reasons why policy owners consider a settlement over their current policy outcome, such as:

You no longer want to pay for your policy

Whether you cannot afford your premiums or do not want to factor in the funds to your monthly income, you should consider a settlement before outright canceling the policy. While a settlement will not give you the full benefit value of the policy, it will be larger than your cash surrender value.

Your policy needs have changed

Maybe you took out a life insurance policy for your children who have grown or your spouse who no longer needs the support. If you do not have any beneficiaries, perhaps you want to take advantage of the funds you spent years contributing to.

Your financial needs have changed

Unexpected circumstances can sometimes impact your financial situation. When the unexpected occurs, a Life Settlement may give you the best opportunity to move forward.

Frequently Asked Questions (FAQs)

A Life Settlement is the sale of an insurance policy to a third party. The buyer becomes the new owner and beneficiary. Buyers pay less than the death benefit but more than the surrender value. They continue to pay premiums, and the difference between the death benefit and the settlement amount is theirs to keep.

It typically takes six to eight weeks to analyze, find a buyer, negotiate, and complete the process. Settlement Benefits Association has a vetted network of buyers to help you maximize your investment’s value.

Contact Settlement Benefits Association to Get Started

If you think a Life Settlement might be your path forward, Settlement Benefits Association wants to help. Everyone on our team is educated in the Life Settlement process. We have developed relationships with dozens of funding groups who are ready to bid on a new policy.

Whether you are committed to pursuing a settlement or still have questions before you decide, we will help you get started with a free policy evaluation. Contact us today to start the process.

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