Mike’s Life Insurance Advice

Hi Margie,

There are a number of reasons people want to cash in their life insurance policies.  Why don’t we take a look at them and some of the choices you have?

You mentioned that you are considering getting a pay out from your life insurance company.  As an alternative, I think you should consider a settlement with an outside company.

A life insurance settlement is an option you have to sell your life insurance policy and relinquish your coverage to a third party.  It may be a better choice than getting a pay out from your life insurance company because it will often put substantially more money into your pocket.

Life insurance settlement companies are third parties that will give you cash if you want to sell your life insurance policy to them.  However, they have a number of requirements that have to be met before they will buy your policy.

First, your policy has to cost at least $100,000.  Some companies will only buy policies that are at least a $250,000.

You also have to be at least sixty-five years old.  However in most cases you will be eligible to sell your policy only after you’ve reached 70.   And finally, your health has to be normal.

Although it might look a bit complicated at first glance, the life insurance settlement process isn’t as complex as it seems.  None-the-less, you should have a trusted financial advisor help you through the process.  You will also have to decide which life settlement company or provider you want to do business with.

Initially you will have to submit all of your medical information.  Then you may be asked to take and pass a medical examination.  If your policy meets the necessary requirements and your medical information meets with their approval, you will receive a number of offers from the life insurance settlement company.

Go over these offers with your financial advisor in order to ascertain wh
ich would be the most beneficial for your circumstances.  Once you accept an offer and your life insurance policy is transferred you can receive the cash value.

Life insurance settlements are available to you whether you have term life insurance or whole life insurance.  There are two subcategories to consider.

Viatical Life Insurance Settlement

A Viatical life insurance settlement is often chosen by policy owner if they suffer from an incurable illness and need money for their medical care.

Senior Life Insurance Settlement

Senior life insurance settlements are designed for senior citizens who would like to have money for other investments.

Before going ahead with any settlement there are three things you should do to protect yourself.

1. Make sure that the broker or settlement company you are working with is licensed from an appropriate state government body.

2. Have your financial advisor go over all the possible risks and contracts available to you.

3. Have a clear understanding of the life insurance settlement process so that there is no doubt in your mind that you want to sell your life insurance policy.

I hope this helped and that you enjoy a wonderful retirement.

Mike