Here's Something Your Life Insurance Company May Be Hiding From You
North American Precis Syndicate
Older Americans may have a financial resource they don't even realize they own. (NAPS)
(NAPSI)—American seniors are postponing retirement, primarily for
financial reasons. Unfortunately, many experience unexpected health problems
and ultimately shorter life spans, according to a recent report from
Bloomberg—fortunately, you don’t have to be among them. More
seniors are exploring creative options to generate the cash needed to pay off
bills, finance vacations or deal with health care expenses.
If you’re over the age of 70, you may have an asset lying in a
drawer right now that could generate immediate cash for your family—and
not even know about it.
Explained Darwin M. Bayston, CFA, president and chief executive officer of
the Life Insurance Settlement Association (LISA), a nonprofit organization
that promotes consumer awareness of alternatives to lapsing or surrendering a
life insurance policy, “You have options if you find that you no longer
need or can afford that policy.”
For example, one option might be to explore the possibility of selling
that unwanted or unaffordable life insurance policy, rather than just letting
it lapse or surrendering it to the life insurance company for the policy’s
cash surrender value.
How A Life Settlement Transaction
The sale of a life insurance policy to a third party for more than the
policy’s cash surrender value is known as a life settlement
transaction. The policy owner gets a cash payment, while the purchaser of the
policy assumes all future premium payments and gets the benefit upon the
death of the insured. Candidates for life settlements are typically aged 70
or older, with a life insurance policy that has a death benefit of at least
$100,000. Seniors who sell their policies may get roughly four to seven times
more money than the cash surrender value of the policy.
“LISA is committed to making sure consumers are aware of the fact
that their life insurance policies have value and can be sold, just like any
other asset or piece of property,” added Bayston. “In all likelihood,
the life insurance company and the agent who sold the policy won’t
share that information on their own.”
In fact, one study found that 23 percent of professional financial
advisers are actually precluded by life insurance companies from disclosing
to consumers that they have the right to sell a life insurance policy they
are about to lapse or surrender. Perhaps as a result, a survey by the
Insurance Studies Institute found that fewer than half of American seniors
are aware of the option of selling their life insurance policy.
For further facts about life settlements, how they work and whether you’re
eligible, call the LISA office at (888) 408-3734 or visit www.lisa.org.
On the Net:North American Precis Syndicate, Inc.(NAPSI)