Life settlements are becoming more and more common, as people realize the potential financial benefits that they can unlock from their unwanted or unneeded life insurance policies. In fact, Americans received almost $848 million in payouts last year from selling their life insurance policies into the life settlement market. That’s money that these policy owners would have lost entirely if they had let their policies lapse and is far greater than policy owners would have received if they had surrendered their policy back to their life insurance company. In fact, on average, policyholders average a payout of 4X more than the cash surrender value in a life settlement.
As life settlement brokers, we know that seniors age 65 and older are leaving huge amounts of money on the table in lapsed and surrendered life insurance policies. That’s why we work so hard with financial advisors to help seniors sell their life insurance policies. A life settlement can provide much needed liquidity for some of life’s most burdensome expenses, like long-term care or medical costs.
A 2017 report by the National Association of Insurance Commissioners (NAIC) Long-Term Care Subgroup includes life settlements among three options for paying for long-term care.
Financial stress is nothing new. For decades, parents, grandparents, and retirees have been kept up at night worrying about how they’re going to pay for their child’s college, how to cover an expensive home repair, or how they’ll be able to handle a spouse’s unemployment.
When you’re living on your retirement savings, any opportunity to reduce unnecessary expenses is welcome. There are lots of ways people go about this.
If you’re a member of the “sandwich generation” – adults who are caring for both their own young children and their elderly parents – then you’re no doubt familiar with the challenges and conflicts that arise on a monthly,