A “Life Settlement” is a lump sum settlement paid to the owner of a life insurance policy by one of many funding sources in exchange for the ownership of the policy. Never before have non-terminal policyholders been able to receive capital in excess of their policy’s cash or surrender value to increase their wealth. A Life Settlement can usually provide anywhere from 2 to 5 times the cash surrender value of the policy. "With the life settlement option availble, there is no reason to surrender or lapse your life insurance policy." says Grant Shellhammer, of http://www.lifesettlementpro.com/.
Generally, anyone over age 70 who has $100,000 or more in life insurance coverage may qualify for a Life Settlement regardless of health condition. Other factors considered in the negotiations are the policy’s cash surrender values and the cost of premiums. A basic principle to remember is that the older the age of the insured and/or the more health complications exist, the higher the settlement. However, each individual’s situation is different from case to case.
The fundamentals of the Life Settlement transaction have technically been around since 1989 in the form of “viatical settlements”. Individuals at any age can qualify for a viatical settlement if they have a chronic or terminal illness such as cancer or HIV. Viatical Settlements have always been contingent upon the health of the insured, whereas Life Settlements are contingent mainly upon the age of the insured. In most states a terminally ill senior applicant will need to use a licensed viatical broker and/or funder in order to abide by state rules and regulations and to retain the tax-exempt status of the settlement.
According to industry reports, Life Settlement proceeds are tax-free up to the cost basis (premiums paid since policy inception). They are taxed as ordinary income from basis to cash surrender value and proceeds above the cash surrender value are taxed as capital gains.
Once the Life Settlement change of ownership has been recorded with the insurance company and the policyholder has received their money, the Life Settlement funding source will continue to pay premiums throughout the life of the insured. All types of life insurance qualify including group, term, whole-life, universal, survivorship and key-man policies.
New Reverse Mortgage RESPA Requirements
New Reverse Mortgage Lender Requirements January 1st 2010 was an important time for Reverse Mortgage Lenders. Real Estate Settlement Procedures Act or RESPA amendment was changed for Reverse Mortgages and there are now some new protections. These protections are built in to the changes to protect the borrower from improper increases in closing costs for the borrower. This article will explain how these changes in the RESPA will affect your financial future, and how it has made the very safe Reverse Mortgage, even safer.
Unveiling the Potential of Life Settlements for Seniors
Life settlements offer a financial lifeline to seniors by transforming life insurance policies into liquid assets. This innovative approach to retirement planning is gaining traction as it provides an alternative to traditional methods, allowing policyholders to access a significant portion of their policy's death benefit in cash. This cash influx can be used without restrictions, offering flexibility and financial relief. Life settlements are particularly beneficial for seniors whose insurance needs have evolved, presenting a strategic option to optimize their financial portfolios.
Seniors benefit from Reverse Mortgage Competition
Reverse Mortgage Lenders are offering better rates and more incentives as the competition in the reverse mortgage industry continues to grow.
