Bottom Line Secrets Retirement : $250,000 Could Be Sitting In Your Desk Drawer Article

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Bottom Line Secrets Retirement : $250,000 Could be Sitting in Your Desk Drawer

On average, a life settlement can provide three to five times more than the policy’s cash surrender value, sometimes more.In today’s economy, life settlements can provide immediate relief for retirees whose stock portfolios have dwindled.

Author: John Yaker

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Are you about to throw $250,000 or more away? If you have a life insurance policy you’re about to surrender back to your provider or, worse, allow to lapse, you may very well be losing a significant amount of money.

Historically, taking a cash surrender from your life insurance provider or allowing your policy to lapse have been the only two options life insurance policyholders have had when faced with a policy they no longer wanted or needed. Unfortunately, 90 percent of policyholders do exactly this – throw away their money without thinking about it.

Fortunately, retirees now have the option of arranging a life settlement – an option that could net them hundreds of thousands of dollars and provide a much-needed cash infusion in these troubled economic times.

A life settlement is, simply, the sale of an unneeded or unwanted life insurance policy to a third party – usually a financial institution – for a lump sum cash settlement. That third party then becomes the policy owner and beneficiary, also assuming responsibility for paying future premiums.

On average, a life settlement can provide three to five times more than the policy’s cash surrender value, sometimes more. If you have, for example, a $1 million policy and your insurance provider has offered $85,000 as a cash settlement, pursuing a life settlement may bring you as much as $325,000 for the same policy. Even term policies, which many people make the mistake of assuming have no cash value, can be converted and used for a life settlement.

In today’s economy, life settlements can provide immediate relief for retirees whose stock portfolios have dwindled and who are facing the reality of not having the money they expected to live on in their retirement years. Additional reasons for pursuing life settlements include:

• Term policy(s) about to expire
• The estate has been significantly reduced, eliminating the need for coverage
• A key-man policy(s) or other business-owned insurance is no longer needed (business sold, executive retired, etc.)
• Change in health status of the insured
• Under performing policy(s)
• Retirement

Most life settlement companies seek policies with a death benefit of at least $500,000 and that has been in force for at least two years. In addition, the policyholder should be at least 70 years old, with a life expectancy between two and 15 years.

The life settlement process is as easy as it is lucrative. Generally speaking, the process takes only 90 days from beginning to end. Once you’ve decided to pursue a life settlement, your life settlement broker will collect and review your insurance and medical information and complete the following steps:

1. Send the case to the banks and hedge funds who buy the policies. (Investors)
2. Negotiate the highest possible settlement offer. This offer is non-binding.
3. If the offer is accepted, contracts and closing documents are sent to the broker for completion.
4. Transfer policy ownership to the investor, place funds in escrow.
5. Release funds from escrow to the seller.

At each step during the process, reputable life settlement companies keep brokers and clients informed regarding the process on a weekly basis and offer complete transparency at each step.
Clearly, life settlements can be a tremendous financial relief in troubled times. If you’re faced with an unwanted or unneeded life insurance policy or can no longer afford expensive premiums, don’t throw your money away. A life settlement can provide the peace of mind you deserve in your retirement years.

About Author

John Yaker’s role in the Life Settlement industry evolved as it began its transition to an institutionally driven market. Today, Mr.Yaker has established himself as a leading figure in the industry. He has grown his practice by working closely with many of the nation's leading wealth management, law, CPA, and financial advisory firms.

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Bottom Line Secrets Retirement : $250,000 Could be Sitting in Your Desk Drawer