| HOME Links / Resources Credit Glossary |
|
Senior citizens above the age of 65 years can sell their unwanted policies to other parties and get a lump sum settlement in cash. Such a Life Settlement is done when the person requires money for some urgent purpose, to invest in business or to simply fulfill some lifelong desire. Life Settlement for seniors is usually done with brokers. These brokers help in scrutinizing the policies and then auctioning them to various interested parties. The party which offers the highest bid gets to buy the policy and becomes liable for paying all the premiums for the policy in future. They settle the policy by paying the senior citizen a lump sum amount in cash. Selling the policy is a long but simple process if a broker is involved. First the policy has to be evaluated. For this, an application is filled out. Medical tests may or may not be necessary. Information of the policy release is filled in the application form. Specific information is then requested by the broker from the company on which the policy is written. Once this information is obtained and filled in the application form, its copies are sent to several interested buyers. The buyers then place bids on the policies. The owner of the policy decides which offer is the most lucrative and sells the policy to them. The original owner's liability for the policy ends here, and further payments are done by the buyer. During this entire process, the funds from the owner are collected in an escrow account, which is then accounted for and paid in lump sum to the owner. Policies that can be sold for settlement can be owned as well as bought by individuals or companies. Their terms and tenures can also be flexible. However, there may be a change in the face value of the policy when it is bought by a new owner. Insurance policies are actually financial assets and they can be cashed in just like any other asset. The settlement procedure helps to do just that. Generally, the payment received by the owner of the policy is much higher than the actual value of the policy at that moment. |