Boca Raton, FL (PressExposure) March 12, 2009 -- Life Settlements, also known as life insurance settlements, provide a sensible exit strategy from unwanted or underperforming life insurance policies. A Viatical or Life Settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its net death benefit. Regulatory usage of the terms âviatical settlementâ and âlife settlementâ varies by state. However, the market generally uses the term viatical settlement to refer to instances where the insured is terminally ill with a life expectancy of less than two years. A life settlement focuses on policies insuring older individuals with life expectancies greater than two years.
Historically, if an owner of a life insurance policy found that the policy was no longer needed due to changed needs or circumstances, the owner could elect to cancel the policy and receive the policyâs cash surrender value as a lump sum.
In the past several years, a number of companies have raised pools of capital and created a more liquid secondary market for life insurance policies. These companies will competitively bid on the purchase of an existing policy taking into account the insuredâs current age, state of health, and the overall economic environment. In other words, if they qualify, those wishing to cash in their policies can now get a competitive market quote based on several bids.
âEducation surrounding the need for Life Settlements is part of the ever increasing need for awareness in the current economic recession. In this program we will demonstrate who qualifies for this financial tool and when a Life Settlement may be necessary. We must raise awareness on this very important issue for national education,â said the Senior Producer.
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