A life insurance settlement takes place when you sold your policy to a third party. The policyholder may sell his policy because he needs cash for medical expenses as he is ill for a longer period of time. The policyholder will do this because he is need of cash now otherwise what is the use of that policy after the policyholder dies. This type of transaction is called as viatical life settlement. If the policyholder surrenders the policy to the insurance company for the cash surrender value, he will not get that much money, instead of that, policyholder can sell that policy to a third party for more money. The policyholder can also sell term insurance policy even if there is no cash value, because the third party can convert it into whole or universal life insurance policies. Delloite consulting has estimated that the senior life settlement market would grow to over $100 billion. A 78 year old man sold his $1,000,000 universal life policy to a third party for $100,000. If he would have surrendered that policy to insurance company he would have received cash surrender value of just $15,000. A life settlement can easily settle debts, can be used for charitable donations or tax deductions, the policyholder can get lump sum payment in the form of cash, fund future investments, and provide funds for assisted living. Life settlement policy qualify whole life, term life, universal life, key man policies, group life, corporate owned, joint survivorships. If you are deciding to go in for life insurance settlements for your insurance policy follow certain guidelines which can make your choice right. Try contacting two or three life insurance settlement companies to know about their offers and be aware of prevailing discount rates. Before doing business with any life insurance settlement companies just check with the state insurance department that these settlement companies have a proper license. Just see to it that the life settlement company has an escrow account with a good financial institution before it sends you the offer papers for your signature. Once all the necessary changes are made in the documents, try to get your payment within two to three business days from the settlement company. Ask the life insurance settlement companies about possible tax consequences and implications for public assistance benefits. Confirm that the company has the money for your payout readily available. Before going in for a life insurance settlements take advice from a lawyer, accountant, or a financial planner.
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