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Senior Life Settlements have provided senior citizens a method to realize the financial value of their insurance policy assets before their maturities. Earlier, a large number of policies would either lapse or be surrendered by senior citizens who were unable to keep paying the premiums. But now, these policies can be settled with a buyer. The Senior Life Settlement industry grew out of the viatical settlement industry. Viatical settlement is given to terminally ill patients, such as AIDS patients, who have a life expectancy of less than two years. However, this period cannot be considered with finality as due to medicines, the life of even terminally ill patients can be stretched beyond two years. Hence, a separate industry, i.e. the Senior Life Settlement industry, grew out of the viatical settlement industry for people having life expectancies of more than two years. Senior Life Settlements are given for senior adults who have crossed the age of 65 years (though the age limit may be different in different states). The Senior Life Settlement industry is responsible to the National Association of Insurance Commissioners. The NAIC released the Viatical Settlement Act in 2001, and the entire Senior Life Settlement industry functions under the guidelines given in this act. Currently, the Senior Life Settlement industry is a multimillion-dollar industry. In a financial report, it was estimated that the industry paid $340 million annually to senior citizens as settlements. This amount is only for the 20% of the total number of senior policies that qualify for settlement according to NAIC norms. More and more senior citizens each year are trying to get their policies settled, and this is leading to a great increase in the market of policy settlement. There are 175,000 life insurance companies in the US, out of which 34 companies handle senior life settlements. It is statistically projected that these providers will be buying $10-$15 billion dollars worth policies in the year 2005. |