Tools for Life Settlements

By: Grant Shellhammer
As the education of life settlements continues to grow, it is important for consumers, financial professionals, and insurance agents to prepare themselves with the tools to maximize their life settlements., also known as life insurance settlements or senior settlements were spawned from the viatical settlement method. A life settlement is the sale of a life insurance policy covering a person who has a limited life expectancy -- normally 10 years or less. Life Settlements are usually geared to seniors 65 and older, and can offer a much better option than lapsing or surrendering a policy back to the insurance company. Life Settlements allow consumers access to a secondary market for an insurance policy that may be underperforming, unwanted, or no longer needed.The first important tool is having the proper life insurance policy illustrations. Life settlement offers are highly based upon the amount of annual premium required to keep the policy in force for a period of time.

Most life settlement companies will need a 10 year, 15 year, and maturity illustration. However, specific cases might require different time frames. It is especially important if you are converting a term policy that you also get the correct hypothetical conversion illustrations. A life settlement broker can usually assist with helping retrieve these illustrations.Life settlements are also based on the medical condition of the insured. A proactive tool would be for consumers thinking of exploring a life settlement to begin requesting the last 3 years of medical records from their primary physicians and specialists (if applicable). Most all life settlement companies and life settlement brokers an also assist with acquiring the medical records. However, that can slow the transaction bye a couple of weeks.The last important tool is having the correct information regarding the life insurance policy. This is extremely important for a premium finance life insurance policy. The needed information would be policy owner and insured information, beneficiary information, state issued, and life insurance carrier. Additional information would be account value, date issued, loan amount (if applicable), and current policy status. Premium financed cases will need to provide trust information, premium finance documentation, and payoff information. Once again, a life settlement company can assist with acquiring the requested information. However, it is important for consumers and professionals to understand what is needed for a life settlement transaction.Life settlements can be a tremendous opportunity for consumers who have a life insurance policy that they no longer need, want, or would just like to free up additional capital. These tools should help you understand and speed up the life settlement process.

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