Cash in Your Life Insurance Policy?

A life insurance settlement presents a unique opportunity to a policy holder to extract the maximum possible value from an existing life insurance policy. He can repurpose those funds for alternative needs. Many people choose this option, because the cash value of a life settlement generally exceeds the surrender value that would have been paid by the life insurance policy.

A life insurance policy is personal property just like a house, car, stocks, and bonds. You can sell your life insurance policy like you sell other personal property items. The sale of life insurance policy is called a life insurance settlement, life settlement or senior settlement.

When the life insurance policy owner sells his own life insurance policy, he transfers all rights and obligations to a new owner. The purchaser of the policy will then become the new owner and the new beneficiary of the policy. He will be responsible for making all of the future premium payments. And, of course, the new owner now collects the full amount of the death benefit when the insured dies.

Policies are sold for many different personal or business reasons. Below are some of possible reasons for considering a life insurance settlement:

The original purpose for the policy no longer applies.
The beneficiary of the policy died and no alternate exists.
Policy holder is chronically ill so selling the current policy provides needed funds to cover financial burdens caused by illness. A viatical settlement gives the ability to regain needed financial security.
If policy holder is over the age of sixty-five, so life settlement or senior settlement maximizes the current assets by eliminating premiums and getting required funds that can be used today.
Insured person wishes to distribute its value while he or she is living.
Personal financial situation has gone bad and unable to make premium payments.
The policy owner's current asset mix is weighed too heavily in life insurance.
Owner wishes to invest in a more appropriate product, such as a lower cost survivor policy, single premium annuity for supplemental income, long term care insurance, long-term care insurance, or other asset protection tools.
A family trust has eliminated the need for personal life coverage.
Policy holder needs cash to fund an alternative healthcare that present insurance does not cover.
Policy was purchased to ensure the availability of funds to pay off a mortgage and the mortgage has been paid.
When a policy is in danger of getting lapsed, the policy holder can turn it into cash.