Life
settlements let whole and universal life insurance policyholders liquidate
their policies, giving them an immediate cash payment in exchange for the
policy's future benefits. There are several times in life when doing this can
make wise financial sense. If you're going through any of these four
situations, consider whether selling your policy via a life settlement can help
you.
A
whole or universal life insurance policy combines several services together,
but the policy's most important protection is its death benefits. These are the
payments that named beneficiaries receive if the policyholder passes away, and
they're often used to make sure loved ones — especially children — are taken
care of in the event of an income-earner's passing.
If
you purchased a life policy mainly to help financially protect your children,
you likely don't need the policy once your kids start their careers. With
promising jobs, they become financially independent and will be able to take
care of themselves. Since they aren't financially dependent on you anymore,
there's little reason to carry death benefits for their protection.
In
this situation, selling your policy via a life settlement gives you a way to
unload the policy without sacrificing all the value it's built up. You'll get a
payment for it, and the money you receive can be put toward anything you'd like
to spend it on.
Most
people experience a decrease in income when they retire, and this can make
paying monthly bills more challenging. At times, the monthly premiums charged
on a whole or universal life policy become too burdensome.
If
you've retired from your career and no longer have the income you once did, a
life settlement can make sense on two fronts.
First,
you'll relieve yourself of your policy's monthly premium payments. The company
purchasing your policy will take over all remaining payments, which can relieve
your monthly budget of a substantial recurring fee depending on the age and
amount of your policy.
Second,
the money you get from the life settlement can be invested so it provides ongoing
revenue. An investment like a certificate of deposit or a treasury bond will
give you regular interest returns without risking your principal. A fixed-rate
annuity will send monthly payments to you for a set number of years.
Since
life settlements provide large and immediate payments, they're an option
whenever you face a major expense. During senior years, large expenses usually
come in the form of major medical costs.
If
you've been diagnosed with cancer or need an operation, selling your life
policy could help pay for medical care that's not covered by insurance. Whether
you have large one-time expenses or have to cover ongoing treatments, knowing
you can afford the costs will reduce the stress associated with your care.
You
probably don't want to sell a life policy in order to pay off a small credit
card bill or low-interest student loan. Should you face more serious financial
troubles, though, a life settlement can provide relief. Specifically, selling
via a life settlement may be wise if you're facing bankruptcy or foreclosure.
Both
bankruptcy and foreclosure are extremely serious and can result in the
forfeiture of assets. In the case of foreclosure, you stand to lose your home.
They also devastate your credit score and remain on your credit report for at
least seven years.
If
you can get enough from a life settlement to avoid bankruptcy or foreclosure,
the sale will help you avoid some of the worst financial problems any individual
can face.
To
sell your life policy through a life settlement, contact Habersham
Funding, LLC.
