Seniors Increasingly Realizing Nest Egg in Life Insurance Policies ...





Unlike younger investors, older adults may not have the time to wait for the market to recover all of their losses, so they’re turning to this previously overlooked asset to see whether they should sell it and use the money to pay medical bills or other expenses. 

Seniors sold life insurance policies with a face value of $11.8 billion last year, almost double the value of policies sold just two years earlier, according to the U.S. Senate’s special committee on aging, which recently held a hearing on such transactions. A “life settlement,” as a sale is called, may be an attractive option for seniors who determine they no longer need their life insurance policy, said Doug Head, executive director of the Life Insurance Settlement Association, an industry group. 

Policyholders typically sell their insurance through life settlement brokers to investment companies for lump sums that are usually several times greater than they would receive if they surrendered the policies to the insurance companies, he said. The new owners pay the remaining premiums on the policies and become the beneficiaries when the original policyholders die. 

But a life settlement doesn’t always make sense, insurance experts caution, and seniors considering such a sale should consult with an independent financial adviser to figure out whether it’s the best move for their particular circumstances. 

“If you’re thinking about selling your life insurance mostly because you’re strapped for cash, there may be other ways to tap the value of your policy without losing your coverage,” said Houston lawyer and insurance expert David McDowell. “You may be able to take out a loan against your policy or receive a partial payout through an accelerated death benefit,” he said. “It’s worth visiting with your life insurance agent and exploring the options before sacrificing your coverage.” 

...

Read more...

Funeral Estate Planning - Financial, Tax, Estate Planning, Wills VS Trusts

Advisors, Estate Attorneys, CPAs, Insurance Specialists, and Health Insurance Agents. By having these professionals in the same National Directory ...