A Growing Role For Life Insurance Settlement Services
A new type of financial service has been introduced to senior insured people in recent years. A life insurance settlement has become the third choice of life insurance policy owners, who would either let their unwanted policies lapse when they couldn’t pay for it or surrender the policy for the cash surrender value.
Even though a life insurance settlement, as well as the cash surrender value, appears to be a payment for the policy, it is more profitable than the latter. This settlement allows the insured senior to sell the life insurance policy to a third party–a businessperson or financial institution–for a much higher price than the cash surrender offered by the insurance company to get an immediate lump sum in cash.
The price of the life insurance settlement is a discounted percentage of the death benefit and expresses the current value of the policy. Still, prices differ depending on the insured person’s life expectancy and the amount of premium payments on the side of the new buyer to keep the policy eligible.
The following proves the growing role of life insurance settlements in the financial marketplace. Taking into account the young age of the life insurance settlement business, it should be noted that insured seniors who decided on such settlements received over a billion dollars combined since 2001. But even more policy owners could have benefited from this service.
As the American Council of Life Insurers tells, “Almost nine out of ten universal life insurance policies are lapsed or surrendered and, moreover, almost 99 percent of term life insurance policies are lapsed without ever paying a death benefit.”
So, don’t miss the opportunity to recoup the money you paid to the insurance company for so long and strike an even more profitable bargain than the cash surrender.
Photo: © spring_peeper
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