Finance & Loans

A Note on Life Settlements

When it comes to Life settlements, you can hear a lot of positive and negative opinion about this billion dollar industry but the truth is that if you are over 50 with a term life insurance policy, this could easily mean increased cash flow.

Yet there are times when seniors are tempted by frauds into buying a life insurance policy without having any need for it. After waiting for two years, they then sell the policy (which becomes uncontestable) and splits the dividends with the other party.

This kind of policy is known as a stranger originated Life Insurance, and is in some states, deemed to be an illegal transaction so people should be careful.

Terminal illness has brought about a transaction known as a ‘viatical settlement’ where the person who does not have much longer is forced to sell the life insurance policy for a percentage of the face value in order to pay his bills. This practice has been done with, and now if patients face a terminal illness, he or she gets the full amount equivalent to the face value of policy that he deserves.

However, with the avoidance of these pitfalls, the best part about a life settlement is the fact that you can get a lot of cash in exchange for the term life policy itself, and whether you have no further use for the policy or do not want to pay the premiums anymore, you can always pocket a neat sum in the future.