Senior Settlement- How Does a Settlement Benefit A Client?
Posted by The Policy Settlement Alliance on Fri, Jul 30, 2010 @ 03:39 PM
By Marlin E Leisher
A senior settlement is a financial tool that is available to seniors that can assist them in their financial goals. Due to the downturn in the economy and limited cash reserves, seniors are looking for alternative ways to add to their retirement accounts.
A senior that has an inforce life insurance policy and is looking to stretch their retirement dollars may consider a senior settlement, since it turns a financial liability into a financial asset. Policies that were purchased years ago may not be affordable, or needed, during retirement years.
If a policy is no longer needed or wanted, the owner of the policy does have a few options, beginning with lapsing or surrendering the policy. These are the options most recommended by the life insurance carrier for obvious reasons. Your purchased a policy, paid years of premium, the carrier used the money for their purposes, and now, doesn't have to pay a death claim.
When a consumer sells a policy as a senior settlement, you receive fair market value for the policy, but the policy will stay inforce until the insured passes away. The investor that purchased your policy will then collect the death benefit, normally for a profit. In some instances, this is not the case. Insureds that live longer than expected will reduce the expected rate of return for the investor, but that is the investment risk that is taken by the investor.
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Note: Blog posts reflect the opinion of the author, which may differ from the opinion of policysettlement.com.