Monday, March 24, 2008

Life insurance settlement: Are You Sure To Get Your Money?

When it comes to life insurance settlements for seniors and younger people, the lifeinsurance settlement market is mired with controversy. Not only was the life settlement market more than a century in the making, but the market for life settlements would not have originated without a numerous amount of judicial rulings, events and prime individuals.

What is life insurance Settlements?

Life settlements are a vital development in the fact that they have introduced a secondary market for life insurance for seniors and younger people. Policy owners have easy access to fair market value for their policies, as opposed to accepting lower cash surrender value from the issuing company of life insurance settlements. A life insurance settlement is a financial transaction in which a policy owner has possession of any unnecessary or undesired life insurance policy which sells the insurance policy to a third party-seniors and younger people-for more than the cash value presented by the life insurance company. Customarily with life insurance settlement, the seller receives instant cash for the insurance policy from the appropriate purchasing entity. This normally becomes the new insurance policy beneficiary at maturation. Moreover, the seller is responsible for all the premium payments from the purchase of the life insurance settlement until the death of the seller.

The Growing concept of Life Settlements

Life settlements are an option for senior high-net-worth policy owners, usually age 65 or older. Independent research estimates declare that with senior life settlements, approximately 20% of insurance policies have a market value that goes beyond the cash value offered by the insurance carrier. Many policy owners may lack familiarity with senior life settlements, until a suitable financial professional mentions the life insurance settlement option to them. Esteemed proponents such as United States Representative Bill Gradison, Warren Buffet and a number of media sources including Time Magazine, The Economist and The Wall Street Journal brought attention to the concept. With a growing number of reports on senior life settlements, more experts now believe that educating clients about offering life insurance settlements should fall under the fiduciary responsibility of a consummate financial advisor.