Life Settlements

So life settlements are a way that you can potentially sell your life insurance policy to a third party that would be interested in buying your life insurance policy. What if you’re in a situation where the premiums on your policy have risen significantly and you’re looking at that saying that’s not something we can afford at this stage. Well that’s were potentially a life settlement might come into play to see if there’s some other company or individual that may be interested in buying that life insurance policy. So you typically have three parties involved with life insurance. You have the owner of the policy, the insured and then beneficiaries. So you can sell this policy again, to a new owner, but they’re also in that situation going to change then the beneficiary to themselves and so when you pass away, then they would collect the benefit. There’s different types of life insurance that are factored into this whether that’s term life insurance, whole life, universal life, variable universal life. A variety of policies that can be considered in this scenario. The amount is going to vary based on your age, your health, maybe the cash values you might have in the policy or death benefits. So there’s a variety of factors that come into play here. Companies out there that are doing this, they know the average life expectancy. They know what the death benefit is, so they know that there’s a future fixed payout. And so they’re able to calculate then how much they’d be willing to pay to buy that policy. You could maybe instead sell the policy to an individual. There may perhaps be somebody in your family, a child that’s a beneficiary that would say well, maybe instead of just dumping that life insurance policy maybe I’d be interesting in paying those premiums to essentially then receive the funds back upon your passing. With life insurance you don’t want to just look back over all the years and say well I’ve paid in so much money into this policy, I don’t want to mess with it anymore. You want to look at maybe forward looking of you know what additional costs might you be putting into this policy over the remainder of your lifetime? There’s also viatical sediments or agreements that come into play. These are usually in a case more so for terminally ill individuals. So payouts may be a bit higher in that scenario. I know Warren Buffet’s Berkshire-Hathaway life insurance company is one that is out there that is regularly buying these different types of life insurance policies. So it’s a big market and it’s one that you know the different factors involved because it involves death and death payouts. And so again it’s a situation where if you’re sitting on a life insurance policy that you’re unsure about, we’d love the opportunity to sit down and give you a second opinion on that.