The Life Settlement Guide
Essential details on life settlements:
- How to qualify for a life settlement?
- Why sell your policy?
- What is your policy worth?
- Life settlement advantages
- Frequently asked questions
What is a Life Settlement?
Most individuals are unfamiliar with life settlements. As a result, many have turned to ALIR to provide vital information on this powerful financial tool.
Life settlements are a financial instrument that converts the value of a life insurance policy into immediate liquidity. In order to facilitate these transactions life insurance settlement Providers (the buyer) are connected with life insurance policy owners (the seller). The Provider purchases the policy from the owner, takes over premium payments, and becomes the beneficiary of the policy. At that point the seller is released from the financial burden of further insurance premiums and is free to utilize the capital raised to meet immediate needs.
How do I qualify for a life settlement?
"The process was so easy!"
Qualifying for a life settlement has several variables that are simple to identify and explain. Many life insurance policies qualify for a life settlements.
These include but are not limited to:
- Term Policies still convertible to a permanent insurance
- Whole Life policies (WL)
- Universal Life policies (UL)
- Joint Survivorship Universal Life (SUL)
Additionally, in most cases the death benefit of the policy should be $50,000 or more. As the policy owner, you should be at least 65 years of age or have had a significant change in your health.
Consider Your Options
If your life insurance needs have changed and the policy has outlived its usefulness, you are faced with 4 options:
- Continue paying the costly premiums
- Let the policy lapse and lose any potential value
- Surrender the policy back to the life insurance company for a fraction of its value.
- Sell the policy as a life settlements and receive a significant amount of cash in one lump sum
If selling your policy is in-line with your financial and estate planning needs ALIR Settlements can help you through the process of selling your policy.
WHY SELL YOUR POLICY?
A LIFE SETTLEMENT IS A SMART EXIT STRATEGY AND PROVIDES YOU WITH OPTIONS TO MAKE THE MOST OF YOUR MONEY.
Pursuing a life settlement is a significant financial decision. There are many reasons why seniors consider this powerful financial tool. Let's consider five of the most prevalent:
- Medical Costs: Statistics indicate that a 65 year old couple retiring in 2019 will need a minimum of $390,000 to cover medical expenses. In addition to these costs, assisted living facilities can incur fees in excess of $50,000 per year on average.
- Health Insurance Costs: Research indicates that in 2020 the average retiree can spend in excess of $4,500 per year on health insurance. While health insurance costs continue to rise, a one-time payout from a life settlement can provide the financial resources to manage health insurance costs.
- Support for family members: Often as the needs of family change the usefulness of a future death benefit diminishes. Many seniors look to life settlements to help family members financially now with expenses such as down payments on a home, or college tuition.
- Maintaining a standard of living: With the rising cost of living many seniors are looking for ways to maintain their home. Up to 75% of seniors intend on living in their current home for the rest of their lives. Life settlements can provide need capital for home modification and repairs.
What is my policy worth?
ALIR Settlements collects a number of data points to determine the current value of a life insurance policy. These include details on the insurance policy and the health of the insured.
The three primary factors that influence the value of that policy are:
- Death Benefit: Also known as the face value of the policy. This is the amount paid out upon the passing of the insured.
- Premiums and Cost of Insurance: This expense would be paid by the purchaser of the policy until expiration.
- Life Expectancy: The life expectancy is determined using complex actuarial statistics and the insured's current medical records.
Use ALIR's Life Settlement Calculator today to get your own customized estimate here:
Life Settlement Advantages
- Timely lump sum of cash
- Superior option to letting policy lapse
- Turn-Key process
- Avoid future premium payments
- Generate more value than surrendering your life insurance policy
- ALIR charges no fees or commissions for their life settlement services
Frequently Asked Questions
Are there restrictions on how I use the funds?
- No. This is where life settlements stand out from many of the other common financial options for seniors. You will be completely free to decide how you want to use the proceeds from your life settlement.
Do I still have to pay my premiums?
- No. Once the policy is sold, individuals are no longer responsible for paying any future premiums. Our Life Settlement Calculator will give you an approximation of how much you can expect to save in the future once you are no longer obligated to pay those premiums on your policy. The amount may surprise you!
Will I still qualify for life insurance in the future?
- Looking into future life insurance options is entirely up to each individual. Even after selling a policy through a life settlement, some people still feel more comfortable having some type of coverage, and it is certainly not out of the question. Your agent or financial adviser would be able to guide you in this matter, or you can contact us, and we’d be happy to discuss your options with you.
Do I still qualify if I have a terminal illness?
- Life settlements for patients with terminal or advance-stage illness are also known as viatical settlements. Generally, most people who are coping with such illnesses are well-qualified for this type of settlement. The network of professionals at ALIR Settlements have been successful in obtaining outstanding results for these individuals. Contact us today for more information on viaticals.
Any Additional Questions?
For more details on life settlements, please visit our online resources below or contact us directly.
Easy to use online resource for getting an instant estimate of your policy value.
Details on our hands on friendly team of professionals and how we can help you navigate your life settlement options.
More information on financial assistance for terminally ill patients.
Larger resource to answer additional questions you may have about life settlement.