Life settlements allow seniors to enjoy more of life by offering cash on the dollar for life insurance policies in their later years. Since many over the age of 65 are struggling to make ends meet as life expectancy and care costs rise; it’s surprising that more people don’t know about life settlements. Part of the reason why they aren’t well known is that they are often confused with viaticals and for many insurance agents; they just don’t know enough about their own industry to know what to offer seniors.
What is the difference between a viatical and a life settlement?
Many seniors only hear about settlements of life insurance when they are faced with a terminal illness. Senior Settlements (or viatical settlements) are when you can sell your policy for cash on the dollar amount due to a terminal illness. This can be very helpful in planning to cover end of life care expenses, internment expenses and the general bills associated with terminal care. A life settlement offers cash on the dollar for your life insurance policy but there is no requirement for having a terminal diagnosis. Any senior may take a life settlement on their policy at any time. Viatical settlements offer a faster return for a broker, while carrying a life settlement can be a longer term investment for a broker. For this reason, many insurance brokers won’t even offer the option of a life settlement to their clients.
Why is a life settlement a good idea?
The reasons for getting a life settlement can range from needing cash on hand for a change in home to a more accessible floor plan or better location; to balance out the cost of living that is not met by retirement support funds; and to help better plan your estate by making sure the gift you leave your children isn’t going to add to their tax burden.