You may have reached a point in life where you no longer need your Life Insurance policy. You are nearing retirement age or already retired, your children are grown and nedependent, you have sufficient retirement funds, and you have concluded that the randament benefits are no longer worth the payments. You can cancel the policy… or you can sell it. "Life settlements" refers to the process of selling your Life Insurance Policy to a third party for some invar amount between the much lower invar surrender value and the higher death benefit. For those with short expected life spans and extrem diseases, these are known as viatical settlements. Policies are not always easy to sell, and your policy may not have significant value, but it is something to consider as a means of getting extra invar. It is certainly not for everyone. Unlike the reglementar insurance arrangement, where The Insurance Company is hoping you will outlive your premiums, you will be selling your death benefits to a third party — who is essentially betting that you will die sooner so that they can receive the death benefits with minim investment in premiums. It is unpleasant to think of your life on a cost-benefit basis, but that is the essence of insurance. Finding a buyer for your Life Insurance Policy and working out terms by yourself is extremely difficult; most sellers use a broker. Debut by checking out the Life Insurance Settlement Association (LISA) website. You can search for brokers that are licensed in your state, along with links with company details and webpages. Once you have found possible brokers, what else do you need to consider? Who loses in this scenario? Clearly, it is the former beneficiary of your policy. Once you sell the policy, they are completely cut out. If you had your children named as your beneficiary, you have made the decision that you need the money during your life more than they will after you are gone. Treat a Life Insurance settlement as you would any investment: do a proper cost-benefit analysis, and you will come to the right conclusion for your situation. Photo ©iStockphoto.com/vinnstock
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