Ohio Life Settlement
The growth in life settlements in Ohio, as well as the rest of the United States, has been hard to miss. This practice involves the sale of a life insurance policy to a life settlement company for an amount that is greater than the mere surrender value, but less than the death benefit. This can provide a greater value for a life policy then your insurance company would like you to know. For this and other reasons Ohio insurance companies have tried to limit this practice by requiring that a life policy be owned for at least 5 years before it could be sold by the owner. Although the reasons seem clear from the insurance company’s point of view, this regulation does not benefit the consumer. It is only fair to allow the owner of any asset, like an insurance policy, to sell or transfer the policy as they see fit.
There are many reasons that owners of life insurance would want to sell the policy should the need arise. Many senior may find that they have more coverage than they probably need. Some may find that the value of the policy could be better used in another investment vehicle, in order to provide an increased return. Seniors are sometimes the sole surviving beneficiary once their spouse passes away, which negates the need for the life insurance policy in place. Most will confront this issue trying to go on Medicaid. Qualifying for Medicaid will often require that a life insurance policy over a certain value be surrendered before coverage can begin. A life settlement can provide a greater number of options, allowing a range of care option other than those limited under Medicaid coverage.
The laws concerning life settlements in Ohio can create quite a challenge for those looking to use the asset value of their life insurance. The growth in this practice will likely continue to pressure state to enact legislation that protects and benefits the consumer.