Paying for senior care is a growing concern for many families specifically in areas such as Florida, California, Texas, Arizona, and other states where many Americans choose to retire. Each year seniors and their families find themselves faced with the increasing cost of nursing homes, independent living and assisted living facilities, and the overall cost of living. Many will look for financial options to help pay for these increased living costs and one area of focus can be a life settlement. Selling a life insurance policy that is no longer needed may be the answer to help build that retirement account for senior care.
Many seniors enter retirement prepared with savings accounts, IRAs, 401s, and family assistance, however, even the most knowledgeable, and well prepared seniors often find themselves having unforeseen costs. Today’s ever-changing climate has forces seniors and their families to realize that elder care can have uncontrollable variables, leaving many without the financial abilities to continue care. The rising costs of care facilities and general cost of living has left many seniors and their families feeling a financial strain. While the traditional means of paying for elder care are often put in place ahead of retirement, there are new options, such as a life settlement, that can help fund long-term care and unexpected cost of living expenses.
A life settlement is a financial option available to seniors over the age of 65. A life settlement by definition is the process of selling a life insurance policy to an investor in exchange for a cash payment. Most times a life settlement will result in four to ten times more cash value than if the policy owner were to surrender the policy back to the life insurance company. When an individual sells a life insurance policy, ownership is transferred to the investor in exchange for an agreed to cash payment today. The cash payment is a percentage of the death benefit of the policy. The actual sale value can vary from a low single digit percentage of the death benefit, to in rare cases, as high as 75% of the death benefit. The new owner assumes the beneficial interest in the life insurance policy and it becomes their responsibility to pay all future premiums. The benefit to the seller is a cash payment is received today and all future premium responsibilities are relieved. The cash payment of a life settlement, along with the premium savings, can help to pay for senior long term care, assisted living expenses, and fund retirement accounts.
Qualifying for a life settlement is a simple process. Seniors can sell a universal life policy, whole life policy, variable policy, and can even sell a term life insurance policy. Life settlements are highly regulated and protected with life settlement companies and life settlement brokers both needing licenses to transact business in the policy owner’s state. The life settlement value of a policy is based on a few factors, the death benefit of the policy, the premium amount, the age of the policy, and most importantly the health of the insured. The less healthy the insured, the greater the sale value of the life insurance policy.
Seniors interested in selling a life insurance policy can do so directly through a life settlement company, or with the guided help of a life settlement broker. There are many direct life settlement companies who work with consumers, companies such as Coventry Direct, Abacus Life Settlements, and Magna Life Settlements. It is important to note that selling direct to a life settlement company may result in less cash than if you were to utilize the expertise of a life settlement broker. Life Settlement brokers work on a commission, but for that commission they represent the policy and present it to a wide network of buyers who are otherwise unavailable to consumers. The benefit of a broker is their ability to create demand for a policy which in turn can increase the sale value. Some policies can sell for as much 50% higher when using a life settlement brokers services instead of going direct to a life settlement company. A life settlement broker brings guidance, experience, knowledge, interested buyers, and protection to a policy owner.
After a life settlement sale is complete a policy owner will immediately receive the sale proceeds deposited into their account of choice. The proceeds are now available to use for any current or future financial needs. Some seniors may choose to use the life settlement proceeds to pay off any debt, or they may opt to keep the funds in an account to pay for assisted living expenses and long term care. Cost of living expenses for seniors in retirement continue to increase year after year so having a financial cushion can help put seniors at ease. Others who sell a life insurance policy may work with a financial advisor to put the sale proceeds in an account that can grow each year creating a steady income stream.
Selling a life insurance can be a great solution for any current or future financial needs, but it is always important for seniors and their families to do research and ask lots of questions. It is recommended that you consider using the services of a life settlement broker because they work only for you and not the buyers, and will work to get the highest possible life settlement offer. If choosing to sell your policy direct to a life settlement company, don’t take the first offer. You should always try to negotiate for more money because most of the time there is room for the buyer to increase the life settlement offer. Good luck and if you have any questions give Life Policy Solutions a call at 844-440-7355, or visit our website www.cashoutlifeinsurance.com.