What is Life Settlements?

Chances are, you have owned a term life insurance policy for years. You probably purchased the policy to provide for a beneficiary after your death. However, for many term life insurance policyholders, the purpose and value of the policy begins to change with each passing year or the policy is about to expire and conversion would be too expensive. A life settlement is the solution that can add flexibility to your estate plan.

A life settlement is a financial transaction in which a life insurance policy owner sells an unwanted or unneeded policy to in institutional investor for a lump sum dollar amount. The institution becomes the new owner and beneficiary of the policy and is responsible for all subsequent premium payments. It gives you cash to use however you like: pursue a dream, travel, help a grandchild with college tuition, etc.

While life settlements have become an integrated part of estate planning for people over 65, recently Early Life Settlements have now become available for people who are 56-70 years old. The sale of an existing term life insurance policy transforms what is often seen as a liability or a necessary evil into a resource that can and should be managed as part of an overall financial plan. This new avenue will help you see greater value from your expiring term life insurance policy and begin to realize your goals sooner.

It’s estimated that approximately 73 million Americans currently have life insurance policies, yet many people don’t realize how powerful an asset your policy can be in the battle for maximum wealth appreciation.

Instead of letting your term life policy expire without paying a benefit, you can use an Early Life Settlement to your advantage. Here are some reasons to leverage this new opportunity:

• Turn an expiring asset into liquidity for your estate
• Take advantage of other investment options
• If premium payments are no longer affordable
• The status of your estate has changed, and life insurance is no longer needed to pay estate taxes
• An individual prefers to discontinue a current policy in favor of survivorship coverage
• To realize an immediate gain from your future asset

Many savvy investors now see the true value of their term life insurance policies. Given the current decline in traditional assets, like stocks and bonds, now could be the best time ever to realize the power and flexibility that has been locked away in your term life policy.