| Dispelling Life Settlement Myths |
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| Written by Kelly Ramirez |
| Monday, 28 June 2010 09:52 |
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Most Americans are still unfamiliar with life settlements. For those that have heard of the practice of selling an existing life insurance policy, there are a number of common misconceptions about the relatively new transaction. These misunderstandings too often bias or prevent people from exploring the option that could potentially offer a great financial benefit.
Most Americans are still unfamiliar with life settlements. For those that have heard of the practice of selling an existing life insurance policy, there are a number of common misconceptions about the relatively new transaction. These misunderstandings too often bias or prevent people from exploring the option that could potentially offer a great financial benefit. The earlier predecessor to life settlements were viatical settlements. This practice involved third parties buying life insurance policies covering terminally ill insureds. As the industry and buyers evolved, viaticals fell out of favor for a number of reasons. The focus shifted to healthy senior citizens. Now, life settlements are solely focused on healthy seniors and a terminal illness is in no way a prerequisite to selling an existing life insurance policy. When someone buys a new life insurance policy, quite often a medical exam is required. However, when selling an existing policy in a life settlement no medical exam or doctor visit is required. A life settlement broker will request the existing medical records from the insured's physician and then forward to an independent actuary for review. Those reviews are used by potential buyers to formulate their purchase offers. Some people think that a policy must have extensive cash value to be sold in a life settlement. The more cash value built up in a policy, the more difficult it becomes to sell it. Life settlements are attractive to sellers when they offer sales prices in excess of the cash value amount. The economics of the transaction are difficult to make work if a policy has too much cash value. Life settlement buyers favor policies with little or no cash value accumulated in the policy. Life settlements are really much easier than most people think. The key is to find a good life settlement broker, who should do most of the work. Then sit back, relax and evaluate the offers for your policy. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Looking to find the best information on a life settlement, then visit www.life-settlement-index.com. |