If your life insurance policy has become unnecessary or if your premium payments are becoming difficult to make, you might want to consider cashing out with a life settlement.
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What is a life settlement?
A life settlement is not equivalent to surrendering your policy. Policy surrenders will typically pay much less than a life settlement, which is an easy way to sell your policy for its true market value. Money obtained from a life settlement can be used to pay off debt, make up for losses in the stock market, or to make purchases that will make your retirement more of a joy and less of a burden.
Life settlements will provide you with cash in exchange for your life insurance policy based upon such factors as your age, your health, the amount of your life insurance policy, and the length of time for which you have held your policy. In addition, competition among life settlement companies will ensure higher payouts as they compete to buy your policy.
How does the evaluation process work?
Locate a broker that deals in life settlements. Your broker will need a copy of your medical records, a copy of your life insurance policy, and any completed appraisal forms. The broker will then negotiate with various life settlement companies and will come back to you with offers. Once you have accepted an offer, you will be asked to sign a purchase contract, and you will need to submit change forms to your insurance company. Once any processing is completed, your insurance company's escrow firm will receive confirmation of the change of ownership and will issue a check to you. The entire process can take as little as two weeks, but overall processing time will depend on the responsiveness of your insurance company.
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The success of your life settlement will depend upon a number of factors. If you are over 65, have held a life insurance policy in excess of $100,000 for over two years, and have medical conditions that threaten your life expectancy, you will reap the greatest benefits from a life settlement. Best of all, you will be free of high premiums, and you and your beneficiaries will be able to enjoy your benefits now.