Study after study portrays several misconceptions people have about their retirement years. Many believe that a nest egg can be built within a relatively short period of time, they underestimate the amount of money needed to sustain their pre-retirement lifestyle after they retire, and they imagine retiring at age 55 or 60 when the reality is that many people are working full or part-time into their 70s and beyond. If you are nearing retirement or are already there, it is time to take a hard look at your life insurance policy, which can be converted into cash to enhance an inevitable change in both living expenses and lifestyles.

Your current insurance policy may not be as suitable to your current situation as it was when you first bought it. The introduction of new and improved financial products now allows you to reevaluate your financial plan. A life settlement is one of the options many seniors are utilizing for their financial benefit to achieve a higher quality of life in the years to come.

You should choose a life settlement if you are a qualified senior who has a life insurance policy that is no longer wanted, needed, or affordable. Many policies lapse or are surrendered for minimal cash values, but with a life settlement, policy owners receive substantially more in exchange for their life insurance policies.

A life insurance policy owner has several reasons for considering the sale of a life insurance policy. While the primary benefit of selling a policy in the life settlement market is to receive a cash payout greater than the cash surrender value of the policy, there are many secondary and underlying motives, including, but not limited to, the following:

  • A policy is no longer needed or wanted (e.g., spouse dies, divorce, children are grown up and financially responsible, etc.)
  • Changes in estate, tax or financial plans or changes in law, etc.
  • Premium payments have become unaffordable as policy owners grow older
  • Investments in the insurance are no longer appropriate
  • Disposal of unneeded “key-man” insurance or other business-owned insurance
  • Fund the purchase of new financial product/estate planning tool (annuities, life insurance or investments)
  • Charitable giving
  • Trust evaluation
  • Decline in health has increased medical expenses
  • Fear of leaving family burdened with debt
  • Alternative funding is needed for more suitable financial products
  • Changes in insurance and investment needs and/or goals
  • Policy performance does not meet expectations
  • Family/beneficiary status changes
  • Recovering assets from business-related insurance plan
  • Estate-planning needs of the insured have changed significantly
  • Satisfy the need for cash in a forced liquidation due to bankruptcy or financial difficulties
  • Liquidate policies donated to not-for-profits
  • Change in a company’s management
  • 1035 exchange for new life insurance policy
  • When loans need to be paid off
  • When you want access to the value of your life insurance
  • Investments in the insurance is no longer appropriate