Life insurance policies come with many benefits, life settlements being one of them. While life settlements are great options at receiving cash when most needed, not many people know the process or how it works, or the difference between payment and settlement.
A settlement can help you survive even after you retire. The terms and conditions that are included in the settlement process may seem long and complicated initially, but once you are familiar with the details you need and documents you require, then the whole process gets to be really easy.
Why Should You Opt for A Life Settlement?
It may be an unknown fact, but almost 80% of insurance policies lay unclaimed. Hence, whatever money you invest in your policy, annually, will not fetch you, or your beneficiary, any profit in the long run. Whatever you may have considered as an asset to yourself ends up becoming an asset to the insurance company. This is why many people decide to go for life settlements and stop investing in their ongoing insurance policy.
If you think about it, life insurance is like an investment, but an investment that can’t be liquidated; but, insurance policies have a characteristic that resembles liquidation of an investment. They can be converted to cash for individuals who are insured. As people get older, they usually can no longer afford to pay the premium on their insurance policies. This a case where it is favorable to settle your life insurance. This is where they dissolve the policy and use the cash obtained to pay any outstanding expenses.
Viatical Settlement Vs. Life Settlement:
The term “viatical settlements” can confuse and intimidate people. The characteristic feature between the two settlements is that the insured sells off his policy to third-party buyers in both the cases. An insured is only eligible for viatical settlement if they are suffering from a terminal illness and have a life expectancy of two to three years. Companies that specialize in Viatical settlements can provide you with a lot more detailed information on this process. It is essential that you know all the details in every agreement and decides on the one that is most important to you.
The Settlement Process:
Once you have seen the various details on eligibility and sale of insurance plans, it is vital that you know how the process turns out. You have now decided that you are selling your policy, you need to find a substantiated agency that will help you.
The procedure includes noticing a purchaser who will take on the possession of your policy. Once the buyer is found, he becomes the owner and takes responsibility for the policy; this includes paying the premiums and also receiving the aids of the policy.
The most important thing to find is a suitable buyer; this is when you decide to sell your insurance policy. Now, settlement agencies adopt existing insurance policies and seek the market for potential buyers who are interested in your policy. You need to know the difference between payment and settlement when the hunt for the buyer begins; this is the way you will stay on top of things when a new investor is found.