Life settlements are designed for the purpose of cashing in on the cash value of a life insurance policy in a manner that is legally acceptable. A life settlement, also called a life annuity, is the transfer of an existing life policy for less than the cash surrender value, but not less than the cash surrender value. There are many reasons that a policy holder might decide to sell his life insurance policy. Many people may need money for one reason or another, such as to pay for medical expenses or to purchase a home. Others may need cash for other reasons, like to make improvements on their home and build equity. Still others may need cash to support their children after they have passed.
If you are thinking about selling your life insurance contract, the first thing you should do is contact a life settlement provider. There are several types of life settlements available to investors. You should get quotes from several life settlement providers before you decide what provider to use. Most providers will require that you pay for the quote, but some may not.
Once you have received the quotes, you can determine what price you are willing to offer to sell your life insurance policy. This is referred to as the cash surrender value. This amount should be in a format that can be easily understood by an experienced life insurance transaction broker. If you are not an experienced life insurance transaction broker, you should use a website that provides online pricing for life settlements. This will save you time because the quotes will already be provided to you by the life settlement provider.
Once you have decided on a price, you should contact a licensed life settlement broker to assist you in the transaction. The broker will act as your representative and will be responsible for ensuring that you understand all the terms and conditions of the life settlement. It is your job to be completely honest with the life settlement broker so they can get an appropriate price for your life settlements.
After you have determined the appropriate price, the life insurance policy owner should call you and offer to sell their policy. You should take the offer seriously and call the policy owner back within twenty-four hours with a pre-determined phone message. You should never take the first offer, because it may be the last offer. A good rule of thumb is to always negotiate until you get a rate that you are comfortable with and still below the surrender limit.
The life settlement broker that you use should make the presentations to the policy owners on your behalf. They should explain all the benefits of the settlement to the policy owners. They should explain the tax implications of the transactions very carefully. They should provide solid financial arguments for the settlements and encourage the policy owners to go for it. If the life settlement providers have financial objections, the brokers should explain the objections and why the objections are not compelling.
Once the policy size has been established, the life settlement providers will want to know the expected economic value of the policy. The financial experts will tell you how much additional cash you would receive with the policy size increased or decreased. They will also tell you how long you would have to live in order to receive all the additional cash. These numbers should be agreed upon before the negotiations begin.
The life settlement industry has been around for over one hundred years. There is a lot of competition in this industry. Many brokers are competing against each other for new business. For this reason, you need to do your homework before beginning the negotiations. You should ask how long the life insurance settlements have been in effect and what legal basis they are based on. The truth is that life settlements have been around for years and they are becoming more popular now.