Thanks in large part to the tremendous advances in medicine, people are living a lot longer today than they did back 50 or 100 years ago. According to the National Center for Health Statistics, a man born in 1930 had a life expectancy of 58.1 years and a woman born in 1930 could expect to live for 61.6 years. Men born in 1950 could be expected to live until age 65.6 and women to 71.1. In 2010, the expected life span of a man born in that year stood at 76.2 and, for a woman, at 81.1.
When you were younger and purchased a life insurance policy, you did so for a specific reason. Now that you are older, your circumstance are almost certainly different. Today, you may decide that you no longer have the need to maintain your life insurance coverage. It might be to your benefit to turn your policy into a lump sum of cash. Finding a provider in the life settlement industry can be your best option when you make the decision to relinquish ownership of your life insurance policy.
Deciding on Selling Your Life Insurance Policy for Cash
If you decide to relinquish ownership of your policy, there are several different approaches you might take. The least attractive of your options is to simply stop paying your premiums and let your policy lapse. When you do that, you may be giving up any value that has built up after years of paying your premiums. A second alternative is to take the cash surrender value of your policy. While better than letting your policy lapse, this option may not return much of the real value that is in your life insurance policy. That leads the third, and quite likely, the best option – a life settlement.
The life settlement industry is a relatively new industry that developed as a way of helping millions of people obtain more money from their life insurance policies than they could get by going directly to their insurance companies. When you qualify for a life settlement, you generally get well above the surrender value and somewhere less than the face value of your policy.
Life Settlement Industry History
Back in the early 1980’s, when the AIDS epidemic was taking many lives, patients were able to receive accelerated death benefits from their life insurance provider. Viatical settlements became available to policy owners who were terminally ill and had a life expectancy of less than 24 months. As medical knowledge and treatment of AIDS patients improved, so too did the life expectancy of these patients. While many of these patients still needed to access money from their insurance, they were not categorized as being terminal and could not qualify for a viatical settlement. Out of this need, the life settlement industry began in the secondary market for insurance.
It always is a smart idea to review your insurance needs as your life circumstances change over time. Getting a life insurance settlement does require you to meet certain benchmarks, but many people do qualify. In order to see if you qualify and can take advantage of a more generous offer to buy your life insurance policy, you should have your policy valued. If you do qualify, you are under no obligation to accept a life settlement offer and are free to proceed as you wish.