Life settlement funding, also referred to as a senior settlement, provides a lump sum of cash to life insurance policyholders. When going through a life settlement transaction in essence you are a liquidating a life insurance policy for an amount higher than the cash surrender value but lower than the face value of the policy. If a senior person, over 65 years old, owns a policy that is no longer needed they may have an option to sell their life insurance policy into the secondary market.
Life settlement funding is typically used by those seniors that can no longer afford to pay the premiums on the policy and risk a lapse policy, otherwise losing the death benefit. Through life settlement funding you can sell a policy at a much higher strike rate than selling it back to the insurance carrier. Life settlement funding companies will take the policy and shop it into the secondary market. The buyers of life settlements are typically large financial institutions and hedge funds. When an investment firm decides to purchase a life insurance policy they agree to take on the ongoing premiums on the policy.
Once the firm purchases the life insurance policy they immediately become the beneficiary of the policy and will receive the death benefit once the policyholder passes. Life settlement funding can help relieve policy holders of ongoing monthly premiums while providing funds to help out with ongoing medical, health and living expenses. These funds are also used to supplement a loss of income and help for a more comfortable retirement.
Life settlement funding has become increasingly popular over the last few years. As investors and seniors become aware that life settlement funding exists, the industry is expected to rapidly increase over the next few years. There are billions of dollars that are currently being spent on unaffordable and unwanted policies. The prices for policies are also expected to increase due to more competitors entering into the marketplace. This could be good news for seniors that are interested in life settlements as it will ultimately increase the value of these policies in the open markets.
If you are a senior and searching for life settlement funding, contact Ideal Settlements today. If you are searching for additional information on a life settlement, visit Ideal Settlements on the web.