What is a life settlement? Top 5 FAQs
by Arina Smith Insurance 11 January 2021
There’s a lot of misconception regarding life settlement. Trying to ask yourself what is a life settlement? And surprisingly, you will not have a definitive answer. However, you need not worry. All your questions ranging from what is a life settlement? To how to sell your life insurance, answered in this quick article. In a line, all your life insurance settlement FAQs are the focus of this article.
1. What is a life settlement?
If you acquire a life insurance policy that you have been investing in but no longer find the need for, you can choose to sell the policy in return for cash. There are settlement companies that evaluate your life insurance policy and help you with a settlement. The term used for such a process is life settlement. However, the system is not applicable for any and everyone. There are certain criteria that one needs to match for qualification.
2. How long does it take for a life insurance settlement?
After you successfully find a life settlement company that provides the right value for your life insurance, it can take anywhere between a few days to a couple of weeks to obtain the agreed-upon lump sum amount for your insurance.
3. How to check eligibility for my life settlement policy?
There are various methods used to find eligibility. To start with, you can contact a settlement agent and ask them to help you with your eligibility. The company you choose for settlement will also assist you in investigating your eligibility. This is a primary step that you must take before moving forward in the process of a life settlement. The general norm for eligibility includes a minimum of 65 years of age and a life insurance value of about $100,000. Both the criteria can differ depending on the settlement you choose. Individuals suffering from a death threatening disease find themselves at the forefront of any approval to sell life settlement, negating any eligibility criteria.
4. How to choose a life settlement agent?
Start by grouping the top and most recommended settlement companies in your area. Following, get the right valuation from these companies of your policy and choose the one with the best valuation. Also, note that not every settlement company is regarded by the government. So, make sure you choose a company that is governed by state law. Doing so will mitigate any risk of fraud.
5. How does life settlement work?
The process is fairly simple. When a settlement company agrees to buy your policy, they tend to pay you a certain overall amount for that policy. Plus, the company also pays any premiums that may be pending. This way you get cash and the company gets your policy. The company earns upon your death through the policy amount and benefits attached to it.
If you have a life insurance policy that you don’t want to pay for anymore, go on, find a life settlement company, and sell your life insurance at a decent value.