Senior Life Settlement

What Is A Senior Life Settlement

A senior Life settlement is where an elderly life insurance policy holder sells their policy to an investor for a lump cash settlement. In some situations this could be a viable alternative to allowing the policy to lapse, perhaps because of their increasing medical costs. Senior life settlements will typically yield the policy holder 50-80% of the policy's face value. In return, the investor will continue to pay the premiums and will receive the full lump sum on the policy holder's death.

A Senior life settlement should not be confused with a viatical settlement, which is where the policy holder has been diagnosed as being terminally ill. It is essential if you are thinking of this type of insurance settlement, speak with a competent, impartial financial advisor. Whilst, in some situations the cash settlement of a life insurance policy may be the best alternative to allowing the policy to lapse, this may not always be the case.

If you are considering a seniors settlement, please bear in mind that the regulation of the industry varies from state to state. For example, Illinois at the time of writing does not require agents to be licensed and therefore protecting seniors from potential fraudulent cash settlements needs to be addressed. There are also concerns about whether the investors purchasing these types of insurance settlement should be regulated, such as the doctor or carers of the policy holder, since this could ultimately result in a conflict of interest.

Next > Viatical Settlements