| Exchange Your Life Insurance Policy for a Life | | | | the most common reason for selling existing life |
| Settlement | | | | policies. |
| Life insurance policies are taken with certain | | | | Better financial options might be available in other |
| objectives in mind, such as providing for your | | | | forms. You could invest the life settlement proceeds |
| dependents if you die too early. As the dependents | | | | in a retirement community home, with facilities |
| become independent, and your own monetary needs | | | | typically needed by retired persons. Or, you could |
| increase owing to old age health problems, the life | | | | buy an annuity that provides very attractive returns |
| policies could become quite unattractive. The premium | | | | and even provides a death benefit. |
| payments could become an unaffordable financial | | | | You could also opt to go on a vacation trip you have |
| burden in such cases. | | | | wanted for long, now that you are free of many |
| Until recently, there were only two alternatives for | | | | obligations. Instead of keeping an unneeded life policy |
| the policyholder in such a situation. The person could | | | | going, you might decide to go on this vacation. |
| let the policy lapse, losing all the investment in the | | | | It is also possible that the premium amounts on your |
| form of premium payments made over the years. | | | | policy are escalating. You might find it better to opt |
| The second option was to surrender the policy to | | | | for a life settlement rather than pay increased |
| the insurance company. The company typically paid a | | | | premiums. The proceeds of the settlement might |
| surrender value of 3-5% of the policy's face value to | | | | help you meet heavy medical expenses. |
| the policyholder. | | | | You might also find that your estate could be planned |
| A new option is now available in the form of a life | | | | better if the life policy is exchanged for a life |
| settlement. A class of new investors would buy your | | | | settlement. |
| life insurance policy, which is freely assignable. They | | | | For these and other reasons, a good market has |
| would undertake to pay the future premiums and | | | | developed for life settlements. |
| also pay you a lump sum that could on the average | | | | Many States Have Regulated Life Settlements |
| be three times the surrender value. | | | | Many states have passed laws that offer greater |
| More and more investors are entering the life | | | | protection to buyers of life settlements. Some states |
| settlement market, making it possible for sellers of | | | | restrict sales of policies to cases where the |
| unwanted life insurance policies to obtain attractive | | | | policyholder is terminally ill, however. Even in states |
| prices. And there are several brokers in the life | | | | that have no regulations, you can expect normal |
| settlement, who would compare the prices and get | | | | protection against fraud. |
| you an attractive offer. | | | | How Are Life Settlement Amounts Determined |
| Reasons for Selling Life Insurance Policies | | | | Factors like your current age, state of health and |
| In addition to changing life circumstances, there could | | | | economic environment determine the amount that |
| be other reasons why you want to sell your life | | | | you could expect as life settlement. |
| policy for a life settlement. | | | | It is also possible that your application for a |
| Your policy might have become outdated, with much | | | | settlement is not accepted by a settlement provider, |
| better policies in the market now. You might decide | | | | or that the offer of the provider is not considered |
| to abandon life policy as an investment, or to use the | | | | satisfactory by you. In such cases, you could |
| proceeds of selling the existing policy to buy another | | | | approach another provider. |
| with more attractive terms. This is reported to be | | | | |