Frequently Asked Questions
What is a Life Settlement?
A life settlement, or senior settlement, as they are sometimes called, involves selling an existing life insurance policy to an entity other than the company that issued the policy – for more than the policy's cash surrender value, but less than the net death benefit.
Life settlements benefit senior citizens by offering a valuable option for an unneeded or unwanted life insurance policy over the alternative of surrendering it for the policy's cash surrender value (if any) or allowing it to lapse.
Why would I sell my Life Insurance Policy?
A life settlement may make sense for you if you no longer need or want your current policy, or if you no longer can afford the expense of paying insurance premiums and are willing to give up or replace coverage. Every individual should consider his or her own unique circumstances before selling a life insurance policy. You may have alternatives that make more sense than selling your policy, such as borrowing against the policy. You may also be eligible for accelerated death benefits, which allow an individual with a long-term, catastrophic or terminal illness to receive benefits from a life insurance policy while alive. Check with Wealth Assurance or the company that issued your policy if you have any questions about these options.
Would I still make premium payments?
No, once the policy is sold you are no longer responsible for any of the future premium payments.
What is my policy worth?
The amount paid to a seller depends on several factors, for instance the medical condition of the insured, the amount of premium payments necessary to keep the policy in force and the cash surrender value of the policy. It is not uncommon for a policy to sell for more than three times the cash surrender value.
When should I consider a life settlement?
- When you are 56 years of age or older
- When a policy is lapsing or being surrendered
- When there is no longer a need for the security that the policy provides
- Premiums have become unaffordable
- Funds are needed to pay for long-term care or health care costs
- Financial hardships are present
- When there is a need for new life insurance, annuities or long-term care
- When the insured has outlived his or her beneficiaries
- When there is an estate tax change
- When a charitable organization that owns a donated policy no longer can maintain premium payments
- When there is a change in the health status of the insured
- When there is a liquidation of assets due to bankruptcy
- When there is a retiring executive covered by a key-man policy
These are a few of the many reasons why many would consider a life settlement.
What about my privacy?
Consumer privacy is very important at Wealth Assurance. We have privacy, anti-fraud and security measures in place to safeguard your personal information.