Cash Payout: Senior Life Insurance Settlement

Those choosing a senior life insurance policy are usually concerned that their families are covered financially when the people die so that the beneficiaries are not burdened with the cost of the funeral arrangements or the debt that the person has. They also might be purchased as a way for children or grandchildren to have a gift when the person dies, leaving behind a sum of money through a simple life insurance policy. There are three types of life insurance that people buy. Term insurance is the cheapest, often costing about ten to twenty dollars per month, depending on the payout. Whole life insurance is permanent insurance and follows the person throughout his life, thus gaining value. Universal life insurance also gains value and works like a tax deferred savings account.

Needing Money

There are times that a person might find that he is in need of money or that some family member is in need of money. This can be the case in times of terminal illness or chronic illness when a person is in the hospital and has large bills to pay. If the person is over seventy and has a high net worth policy, the person might be able to seek a senior life insurance settlement. With a senior life insurance settlement, they actually sell their life insurance policy to a third party who pays them cash for it. The cash amount is less than the payout amount of the policy once the person does die.

The benefits of a senior life insurance settlement works for both parties, depending on the situation at hand. The senior gets the cash that he needs, and although he has to pay taxes on it, will be able to do with the money as he wants before he dies. The third party company that buys the policy in the senior life insurance settlement also benefits from the transaction since it will get the full amount of the policy payout after the person has died. Thus, the company makes back the amount paid out plus many times more money on the policy. In order to complete one of these senior life insurance settlements, there are many rules and professionals that have to be involved. Usually the person will need to hire a lawyer who is trained in senior life insurance settlements to do the bargaining for him so that he gets the best value for the policy as possible.