Who Benefits from a Life Settlement?

There are many reasons why a Life Settlement can be the perfect financial planning tool for people who have an active insurance policy worth $500,000 or more. However, there are four, general types of people that are in the right circumstances to potentially benefit from the life settlement process:

1. Seniors 76 years or Older

Seniors 76 years or Older who have an unwanted or unneeded policy and want to sell it and use the money for any number of reasons:
 

• Premiums have become unaffordable
• Term period or conversion privilege is expiring
• Financial hardships are present
• Change in estate value
• Long-term care is required
• Death of a spouse or divorce
• Policy has underperformed
• Your business is sold, or you retire and corporate coverage is no longer needed
• Any other change in the original need for coverage

2. Relatives Of Seniors 76 Or Older

Typically, adult baby-boomer children of aging parents are the beneficiaries of their parent’s life insurance policy; however, beneficiaries can sometimes be other relatives.

Baby-boomer children see their parents aging and facing challenging financial or health circumstances. The adult children are financially stable and no longer need to be the beneficiaries of their parent’s insurance policies. They can advise their parents to sell their policy via the life settlement process and generate large lump sum of cash.

The life settlement sum is up to 8 times the amount normally paid when people “surrender” their policies to their insurer. A life settlement can ease their parents’ worries and take care of living expenses, increased medical costs or long-term care expenses.