Insurance Premiums

Life settlements can be a viable option for seniors willing to exchange their life insurance policy for immediate cash. A life settlement is the sale of an existing life insurance policy for a lump sum of money. It allows policyholders to access the fair market value of their life insurance by selling their policies and receiving payments greater than the cash surrender value.

Term Life Insurance Policy Technically, a life settlement contract allows you to sell your insurance policy to a third party in exchange for a reduced amount of the face value. This is possible because a life insurance policy is actually property, like a car, house, stocks and bonds that can be legally sold. A life settlement essentially lets you extract value today from an asset that is generally thought to only have a benefit when you die. Typically, life settlement transactions involve life insurance policies of a large face amount; "key-person" coverage or corporate-owned life insurance; or policies representing excess coverage that is no longer needed.

> News Watch out for life settlements for life insurance Tue, 13 Feb 2007 The National Association of Securities Dealers in America, NASD, has warned elderly people about selling off their life insurance in cash transactions that are being termed ‘life settlements’ or ‘senior settlements.’ The life insurance policy that is no longer required is sold to a third person (such as a business) for more than its cash surrender value but less than its overall net death benefit.

Life Insurance Here's how a life settlement works: When a life settlement company buys your life insurance policy, it pays you a percentage of the policy's face value. Then the life settlement company becomes the new beneficiary of the policy at maturation. As such, it is responsible for all paying all future premiums and collects the entire death benefit when the insured dies.

Settlement Options Choices available to the policyowner or the beneficiary of a term life insurance policy regarding the method by which the insurer will pay policy proceeds. Also known as optional modes of settlement. See also fixed amount option, fixed period option, interest option, joint and survivorship option, life income option, life income option with period certain, and life income option with refund.

Insurance Life Premium A Growing Industry
With a life settlement, you can receive a large sum of cash in exchange for your insurance policy while you're still alive. This eliminates premium payments, accommodates the changing needs of your dependents and provides greater financial flexibility.

One major company offers a rider to a certain whole life insurance policy which allows the insured to increase their life insurance coverage by purchasing up to $100, 000 on each of 9 option dates between the insured's age 22 and 46, for a total of $900, 000 of additional guaranteed future insurability! If life insurance waiver of premium is included and the insured is totally disabled on an option date, the options can still be exercised. As long as the total disability continues, the insurance company will pay for the premium on the policies!

Health Insurance Policy Life settlements can also be used for charitable giving. Complex estate and tax planning strategies can apply when using life settlements in a planned giving program. But here's how this works in simplest terms: You donate your life insurance policy to a charitable organization, which immediately sells the policy for a lump sum of cash via a life settlement.

Uninsurable Risk Class The group of people with a risk of loss so great that a life insurance company will not offer them term life insurance. Universal Life Insurance A form of permanent life insurance that is characterized by its flexible premiums, flexible face amounts, and unbundled pricing factors. See also bundled insurance product. For other information about universal life insurance, see corridor, option A plan, and option B plan.

Health Insurance These and other benefits are making life settlements an attractive option for seniors with unwanted/unneeded insurance policies. Consequently, the life settlement industry has seen significant growth in recent years. A study by Conning & Co. Research found that senior citizens owned approximately $500 billion worth of life insurance in 2003, of which $100 billion was owned by seniors eligible for life settlements. Since 2003, more and more of these eligible senior clients have sold their policies and helped the market increase.

Redating The process by which an insurer reinstates a term life insurance policy without requiring the payment of past due premiums. up Insurance Option A nonforfeiture option under which the net cash value of a term life insurance policy is used as a net single premium to purchase a smaller amount of fully paid insurance of the same kind and for the same period as the policy being surrendered.

Insurance Life Premium Return Separate research by the University of Pennysylvania's business school found that life settlement providers paid approximately $340 million to consumers for their underperforming life insurance policies, an opportunity that was not available to them just a few years before. "We estimate that life settlements, alone, generate surplus benefits in excess of $240 million annually for life insurance policyholders who have exercised their option to sell their policies at a competitive rate," according to the research.

Whole Life Insurance Policy Selling Your Policy
You could be a prime candidate if you are of retirement age, have paid off your mortgage and other debts, and no longer require the financial protection of life insurance. The amount you receive will depend on your age, health, death benefit, and the number of years your policy has been in force.

Auto Cheap Insurance Seniors with the greatest chance of selling their policies are those that are older than 65 years of age, have a calculated life expectancy of more than two years (but less than 10 years) and may have experienced a health change that has led to their insurance premiums increasing. Depending on the policy holder's life expectancy, just about any type of policy can be sold, including universal life, whole life and convertible term contracts. However, policies generally must be valued at least $100,000.

Insurance Life Premium Whole Determining whether to sell your life insurance policy is a purely personal decision. You might consider a life settlement under the following circumstances:

Cheap Home Insurance Policy . Your employment status has changed.

Home Insurance . You need additional funds to pay medical/long-term care expenses.

Care Insurance Long Premium . Your insurance premiums are too expensive and you can no longer afford them.

Home Owner Insurance Policy . You would like to implement a charitable or family gifting plan.

Auto Insurance Company . You are facing bankruptcy.

Travel Insurance Policy Consulting with an Advisor
Before you decide to sell your insurance policy, you should examine all the available options, advises the American Council of Life Insurers, a Washington D.C.- based trade group. And instead of going it alone, consult with a financial advisor who is familiar with life settlements. This could include account/CPA, lawyer (especially elder law attorney), financial/estate planner, certified senior advisor or charitable trust officers.

Insurance Quote Additionally, you might consider working with a broker-although your financial advisor can submit your case to the life settlement company directly. However, in an industry where market value for life insurance policies may be unfamiliar, brokers typically do the best job of getting fair market value for policies. They submit life settlement cases and bids to multiple companies, which can facilitate negotiations between high bidders.

Financing Insurance Life Keep in mind that life settlement companies are essentially investors that fund many transactions each year. They hold purchased policies as portfolio assets, rather than making them available to outside investors. They also have in-house compliance departments to carefully review transactions, and they are backed by institutional funds from a major bank.

Geico Auto Insurance Policy Steps to Life Settlement Transactions
Wondering what happens during life settlement transactions? Here are the steps involved in the typical transaction:

International Travel Health . Step 1: You consult with an advisor and decide to sell your policy.

Auto Insurance Premium . Step 2: You and your advisor select a broker.

Home Insurance Policy . Step 3: The broker submits your case (and you provide a release for your medical information) to various companies.

Travel Health Insurance . Step 4: If your policy is eligible for a life settlement, providers send offers to the broker.

Insurance Life Premium Term . Step 5: You accept an offer and then complete the company's closing package.

Auto Insurance Policy . Step 6: The life settlement company places a cash payment in escrow and submits change of ownership forms to the insurance carrier.

International Travel Medical . Step 7: Once the paperwork is verified, the funds are transferred to you.

Insurance Life Premium Quote David Springer is a consultant for Sovereign Funding Group. Sovereign Funding Group is an experienced, reputable company that offers convenient, no-risk services to help you with the selling of your deferred payments and business financing, including life settlements.

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