The life settlement a type of transaction that occurs when the owner of an insurance policy for life sells the policy in exchange for cash to an outside person. The seller gets an amount in one lump sum, which is usually higher than the value of the policy in cash, but not the death reward. The buyer is an owner in the future and becomes accountable for the payment of the future premiums.
A lot of people believe that life settlements should be only available to those who are dying or have poor health. However, this isn’t always the scenario. Although it is the case that some life settlements are intended for policies about to expire because of non-payment but many of them are intended for healthy people who don’t require or want their life insurance policy anymore.
The following isn’t applicable to life settlements?
If you’re considering trading your life insurance there are some points you need to consider. In the first place, it is important to know that life settlements may not be suitable for all. In order to make the most benefit from a life settlement, it is recommended that you must have a policy that has the death benefit of at minimum $250,000. Also, you must be at least 65 years old of age and have a lifetime duration at least 10 years.
It’s important to note the fact that there are a few life insurance products which are able to be sold via the life settlement. The whole life policies as well as the term-life insurance policy that include conversion rights are typically not suitable to be sold through life settlements. In addition the policy that is used as collateral for loans is not also suitable.
Be aware that there are charges that are incurred when you sell your policy via a life settlement. The fees may vary based upon the service provider, but they usually are between 7% and 15 percent of the total death benefit.
To become a life settlement broker licensed by the state, you must be
1. Complete the life settlement broker pre-licensing course.2. Complete a state-approved life settlement broker test.
3. You can get a bond of surety.
4. Completely submit your request to the regulatory state agency.
The sale of your insurance with an agreement on life can be the ideal way to make an extra amount of money when you retire. But, it’s important to know that some policies are not eligible and there could be costs involved. If you’re considering selling your insurance policy be sure to do your research before you do it and speak with a professional to determine whether this is the best option for you.
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