Life Insurance Settlements
Benefits of Life Settlements and They May Not be Right for You

Reasons for Pursuing a Life Insurance Settlement

Life insurance is purchased for many reasons; the recurring factor is the need for personal or business protection. What happens if your needs change and the reason you purchased the policy has disappeared? Here are some examples of changing circumstances that could trigger the opportunity for a life settlement transaction:

1. Change in estate size
2. Change in health condition
3. Divorce/Bankruptcy/Retirement
4. The need to exchange high annual premiums for monthly income
5. Premiums no longer affordable
6. Selling a business
7. Surrendering a policy or one in danger of lapsing
8. Needs funds for alternative investments
9. A family trust has eliminated the need for life coverage
10. Your children are grown and no longer require the protection
11. You wish to use the money now for a vacation home or travel
12. A need to pay for medical expenses or long-term care

Life insurance is a valuable financial-planning tool for many, but if the need for life coverage no longer exists, why keep paying for the policy?

When a Life Insurance Settlement May Not be Right for You

Here are a few of the disadvantages that may or may not apply to your situation:

1. If you are on Medicaid or other low-income assistance the proceeds from a life settlement could affect the assistance you receive.
2. If you are in debt, the proceeds from a life settlement could be claimed by creditors.
3. 3. Life Settlements can be subject to both federal and state taxes, while life insurance benefits are usually income tax-free.