What is Life Insurance Settlement? | Expression Green

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Win – Win Finan­cial Solu­tion for Seniors!

A Life Insur­ance Set­tle­ment is the sales of a life insur­ance pol­icy to a third party in exchange for a cash set­tle­ment in excess of the cash sur­ren­der value of pol­icy —even if none exists! This is also called as Life set­tle­ment, Insur­ance set­tle­ment or Senior settlement.

Typ­i­cally, a Life insur­ance set­tle­ment or senior set­tle­ment is about three to five times the cash sur­ren­der value of the policy.

Life set­tle­ment: When an indi­vid­ual who does not have a ter­mi­nal or chronic ill­ness sells a pol­icy for other rea­sons, includ­ing changed needs of depen­dents, want­ing to reduce pre­mi­ums, and cash for meet­ing expenses, that is known as a Life settlement. 

Viat­i­cal set­tle­ment: When an indi­vid­ual with a ter­mi­nal or chronic ill­ness sells his or her life insur­ance pol­icy that is known as a Viat­i­cal settlement.

Hith­erto, elderly Amer­i­cans with life insur­ance poli­cies they do not need or can­not afford to keep up have had lit­tle option. They will let the poli­cies lapse or sell them back to their insur­ers. Now lots of them are glad to have an alter­na­tive, i.e. Life Insur­ance Set­tle­ment or Senior Set­tle­ment. Seniors may now be able to sell their pol­icy for far more than the cash sur­ren­der value the insur­ance car­rier would offer.

When you go for Life Insur­ance Set­tle­ment or Senior Set­tle­ment, the life insur­ance pol­icy owner sells his or her con­trac­tual rights under the pol­icy at its present mar­ket value in exchange for a lump sum cash pay­ment, which pay­ment exceeds the cash sur­ren­der value of the policy. 

The pur­chaser of the pol­icy will then become the new owner and the new ben­e­fi­ciary of the life insur­ance pol­icy and is then respon­si­ble for mak­ing all of the future pre­mium pay­ments. The new owner now col­lects the full amount of the death ben­e­fit when the insured dies.

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