Life Insurance Settlement Guide

Did you know that your existing life insurance policy might be an asset that you can convert into cash?

In this guide we will give you more information about this increasingly popular way of getting cash for your life insurance policy.

To start here is an excerpt from an excellent column in the newspaper Des Moine Register about life insurance settlement.

How does it work? In general, the buyer purchases the policy, or a portion of it, at a discount to the actual death benefit stated. When you — the original policy owner, or seller — pass away, the buyer collects the full death benefit.

Charles Corwin says, “Rather than cashing in a policy that is no longer needed, it makes sense to have it valued in the secondary market.” He notes that life settlements are not for everyone, but in those cases where an offer is made, the payment is between 20% and 80% of the policy’s face value, which is considerably higher than the Cash Surrender Value. For example, Corwin says, if your policy’s death benefit is $1 million, a purchaser may pay $200,000 to $500,000. Term policies (convertible and over two years old) can bring $4,500 for a $250,000 face amount when sold by a 70 year old insured.

For the full article please click here.