Easy Money For Struggling Seniors: Life Insurance

Easy Money For Struggling Seniors: Life Insurance

It’s no fun thinking about money, although Carl Fox, Martin Sheen’s character in Wall Street reminded us it sure beats the alternative when he said: “Money’s only something you need in case you don’t die tomorrow.” Many seniors are finding more week at the end of their money. If that’s you, there may be a solution in your financial portfolio, although it is forgotten and collecting dust.

What is a Life Settlement?

Many seniors are opting to sell their life insurance policy to an investor rather than continue to make premium payments or let the policy lapse. Policy holders can receive more money than they could get merely canceling or surrendering the policy, although the amount is less than the death benefit on the policy. The process of selling your life insurance policy for its current cash value is called a life settlement, and it can be an excellent source of cash for someone having an “out of money experience.”

rested in purchasing your life insurance policy for cash through a life-settlement broker or by contacting different life settlement providers directly. It is important to do your due diligence on the company you choose to make sure it is credible and ethical, although the practice has been in place for more than 30 years and has regulations protecting the policy holders.

Is a life settlement right for you?

Selling your life insurance isn’t the solution for everyone, but many seniors are in the position where the benefits outweigh the disadvantages. Here are the main reasons people are opting to sell their policies:

  • The alternative is to let the policy lapse for no value or only the cash value accrued. If you are no longer able to make the premium payments and your policy is at risk of expiring, a life settlement may provide a payout you wouldn’t otherwise see.
  • You have immediate needs such as medical or long-term care and no other resources to cover the expenses.
  • Your beneficiaries are grown. For many seniors, the purpose of the life insurance policy in the first place was to protect their children. As those children grow and become financially independent, the original need is gone.
  • You want a more comfortable retirement than your other retirement funds allow. Many seniors took a hit to their 401K and other retirement accounts during the economic crisis and never recovered from those losses.

Everyone’s situation is unique, and the life settlement investor will perform their due diligence to confirm a life settlement is a good investment for them and is economically beneficial to you. If your situation fits, though, you may find that old policy in the back of the drawer is easy money.