Senior Life Insurance

By Karl Edmunds :

Thousands of seniors across the country have carefully followed the good retirement planning recommendations of their advisors only to find themselves in their late 70s or 80s with life insurance policies that are no longer affordable.

Too many think the only solution is to take whatever cash value, if any in the policy, and let it lapse. Don’t take this final step without investigating the potential of selling your policy in the open market. This strategy is known as a life settlement.

By selling or “cashing in” your policy you can capture the financial rewards of an immediate cash payment without having the policy lapse or be surrendered to the insurance company.

VIDEO EXPLAINING LIFE INSURANCE POLICIES

The cash received in the sale of the policy can be used for any personal need including medical expenses, health care, travel, starting a business or offering support to children and grand children.

To make this strategy work in the most favorable way, you will typically be more than 70 years old and own an insurance policy worth $200,000 or more. In most cases sellers who achieve the best financial payouts are in declining health or chronically ill but wish to use the funds before passing for personal or family reasons.

An active and open market has developed over the years with several firms known as life settlement brokers actively seeking and bidding on all types of life insurance policies. A life insurance policy is a very important asset and can be sold legally and without conflicts.

The buyer of the policy regardless of the policy type becomes the new owner of the policy. The buyer agrees to make all premium payments and ultimately collects the face value of the insurance policy at the death of the insured.

A proper analysis will demonstrate whether the sale of the policy makes economic sense for each individual case. Essentially you must determine what your life expectancy is according to independent sources and weigh the benefits and costs of keeping the policy for the balance of your life versus selling now for a cash benefit.

Unfortunately there is no industry standard available regarding the amount of money you will receive. Each policy is examined case by case based on the factors of age, health and policy characteristics.

The simplest first step is to obtain a no-obligation appraisal of your policy to determine a tentative estimate of potential value. Then you can decide whether to proceed further or examine another strategy.

If you are considering a sale, it doesn’t matter whether the policy owner is a person, a corporation, charity or trust. It can be an individual policy or a group policy and almost any type of policy can be sold including Whole Life, Universal, Variable Life, Term, Convertible Term, Joint and Second to Die.

Buyers of life insurance policies recognize that timing is critical and usually conduct the entire process with efficiency. Generally a one to three month period is needed from start to finish.

Finally, in most situations the funds received from a life insurance policy settlement are tax free up to the policy’s tax basis so talk with your accounting and tax advisor to clarify your tax implications before you make a final decision.

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About The Author:

For more than 20 years, Karl Edmunds has been a noted author within the business and management consulting arena. As a senior, he now engages his curiosity and observations about life to write about key issues of importance to the growing community of seniors (Boomers), and the value of living life to the fullest every single day. Give me your comments and suggests at http://Plan-Retirement.org or http://For-Seniors.org