Essential Guide to Life Settlements and Their Benefits
Explore the essentials of life settlements, how they work, and their significance for seniors seeking retirement income. Learn about top companies and regulatory considerations in this evolving industry.
Understanding Life Settlements: What You Should Know
Life insurance remains a crucial financial tool, especially for individuals with dependents or beneficiaries in families, businesses, or other institutions. The option to sell a life insurance policy led to the creation of the life settlements industry in 1911 by lawmakers. This growth accelerated in the 1980s with advancements in medicine and technology. Typically, transactions involve individuals aged 65 or older who are not seriously ill.
Policyholders can sell their policies for a lump sum, with a third-party assuming responsibility for premium payments. However, buyers should be aware of varying state regulations regarding waiting periods before selling. The industry plays a vital role in healthcare by providing retirement income and long-term care support for seniors in middle or low-income brackets.
Leading companies in the market include:
Welcome Funds - Established in 2000, it has managed over 10,000 life settlement offers in 13 years. Its goal is to connect sellers with multiple buyers, resulting in over $450 million in transactions. They assess eligibility and provide detailed guidance.
Ovid Life - Advocating for consumers with the motto, "We are consumer advocates," Ovid is a top industry player. The platform is free, connecting sellers online to licensed institutional buyers who pay an average of 22% of the policy’s value. In 2017, it facilitated around $1.8 billion in life insurance sales.
Disclaimer: The information provided is a compilation of research, expert opinions, and data. Variations may occur based on individual or institutional offers, and financial conditions change over time. Readers are advised to consult financial professionals before making decisions, as the website disclaims accountability for inaccuracies or differing viewpoints.
