Your life insurance policy is a valuable asset that can be sold for cash or converted into a Long Term Care benefit plan to pay for senior care expenses. This is a great option for people who can no longer qualify for LTC insurance, or need additional funds to pay for their care.
What is a life settlement?
Simply put a life settlement is the sale of an existing life insurance policy for a single lump sum cash payment.
Life insurance is an important part of a financial plan and is intended to provide money to your family after you pass away. Unexpected challenges
often come our way that change our plans quite dramatically. When your health or financial situation change, you and your family may have a greater need for money now instead of when you pass away. Your life insurance policy is a valuable asset that can be sold like a home or investment. A Life Settlement is simply the sale of your existing life insurance policy to a third party for more than the cash surrender value offered by your insurance company. This provides you with money now when you need it most, and provides more money than just taking the offer from your insurance company.
Why would I want to sell my life insurance policy:
Life settlements can be a valuable source of money for those whose life insurance needs have changed, or would have otherwise surrendered or allowed their policies to lapse.
Common examples of these situations include:
- The premium payments have become unaffordable and the policy would otherwise be surrendered or lapsed.
- Medicaid qualification: Life insurance policies with cash value over a certain amount, typically $1,500-$2,000, are considered a countable asset and must be surrendered or sold and the money spent on Long Term Care in order to qualify for Medicaid benefits.
- A senior would like to use Long Term Care services that are not covered by Medicaid, such as Home Health Care or care in an Assisted Living Facility. A life policy can be converted into a LTC benefit and used to pay for these services.
- The policy is no longer needed due to a change in estate planning objectives. Some people have more life insurance than they need and can sell all or a portion of their policy death benefit.
- The policy is underperforming. Some policies do not perform as well as expected and the premiums can become quite expensive. These policies can be sold and the proceeds used to fund a new more cost effective life insurance policy or annuity.
What kind of life insurance policies can be sold?
Almost all types of life insurance policy can be sold under life settlement. The policies include: Universal life, whole life, adjustable life, variable life, survivorship, joint first to die, portable group life, and even term life insurance. Policies can even be sold if they are owned by corporations, partnerships, trusts, and charities.
What if I surrender the policy back to the insurance company?
Upon surrendering your policy the insurance company will refund you a portion of your premiums paid in for your universal or whole life policy called the "cash surrender value". For term life insurance the only option is to allow the policy to lapse with no cash refund at the end of the term.
How much can I get for my policy through a life settlement?
Life settlements offers are based on a number of factors such as your age, health, policy premiums, cash value, and the type of policy. With that said life settlements pay an amount above the cash value and below the death benefit. Typically you will receive 2-5 times the cash surrender vale though a life settlement.
How long does it take to sell a life policy?
Just like selling a house, after a simple application we will get multiple offers from multiple buyers. In 60 to 90 days we will have all of the offers back for you to review. Once you accept an offer you will have the money transferred to your account within about 30 days.
If the policy is going to be converted into a Long Term Care benefit plan this can be done as quickly as 30 days.
How do I start the process?
To find out if you are eligible to sell your policy contact us at the 1-800-321-6361 or Info@NHA.net
