Insurance Settlements Life Settlements - Liquidate your life insurance policy and receive money you can use now.
Eliminate premium payments and get the true value of your life insurance policy.
Life Settlements (Senior Settlements) let you benefit now from unwanted or unaffordable life insurance policies.
While there a many different types of life insurance policies, they generally fall into two categories - term and permanent.
Term Term Insurance is the simplest form of life insurance.
It provides financial protection for a specific time, usually from one to 30 years.
These policies are relatively inexpensive and are well suited for goals, such as insurance protection during the child-raising years or while paying off a mortgage.
They provide a death benefit, but do not offer cash savings.
Purchasing term insurance is like renting a home.
It is a short-term solution.
Monthly costs are usually lower, but you will not be building equity.
Just as many people rent (while saving to buy a home), individuals who need insurance protection now, but have limited resources, may purchase term coverage and then switch to permanent protection.
Others may view term insurance as a cost-effective way to protect their family and still have money to put into other investments.
Permanent Permanent insurance (such as universal life, variable universal life and whole life) provides long-term financial protection.
These policies include both a death benefit and, in some cases, cash savings.
Because of the savings element, premiums tend to be higher.
This type of insurance is good for long-range financial goals.
Purchasing permanent insurance is like buying a home instead of renting.
You are taking care of long-term housing needs with a long-term solution.
Your monthly costs may be higher than if you rent, but your payments will build equity over time.
If you purchase permanent insurance, your premiums will pay a death benefit and may also build cash value that can be accessed in the future.
Renewable Term Insurance.
This policy allows you to renew coverage at the end of the term without having to submit medical information.
The company renews your policy even if your health has deteriorated.
However, the premium rate will usually rise with each renewal.
Convertible Term Insurance.
You can convert your term coverage into a permanent policy without providing evidence of insurability (usually a medical exam).
Premiums for convertible policies are usually higher than for nonconvertible policies.
Once converted, the premiums for the permanent coverage will be higher than those you are currently paying for the term policy for the same death benefit.
However, the premiums for the permanent policy will now remain the same while the term premiums will continue to rise on renewal.
Level Term Insurance.
These policies provide a fixed premium for a certain number of years, usually 10 or 20 years, while the death benefit remains unchanged.
The advantage is that you lock in a certain rate for the period of the policy.
The disadvantage is that rates will jump considerably if you want to renew with another level policy.
Decreasing Term Insurance.
The death benefit in this type of policy decreases over its term.
For example, you might start with $100,000 of coverage and the amount of coverage would decrease by $10,000 each year for 10 years.
The premium will vary over the term of the policy.
Many financial experts consider life insurance to be the cornerstone of sound financial planning.
It is generally a cost-effective way to provide for your loved ones after you are gone.
It can be an important tool in the following ways: Income replacement: For most people, their key economic asset is their ability to earn a living.
If you have dependents, then you need to consider what would happen to them if they no longer have your income to rely on.
Proceeds from a life insurance policy can help supplement retirement income.
This can be especially useful if the benefits of your surviving spouse or domestic partner will be reduced after your death.
Pay outstanding debts and long-term obligations: Consider life insurance so that your loved ones have the money to offset burial costs, credit card debts and medical expenses not covered by health insurance.
In addition, life insurance can be used to pay off the mortgage, supplement retirement savings and help pay college tuition.
Estate planning: The proceeds of a life insurance policy can be structured to pay estate taxes so that your heirs will not have to liquidate other assets.
Charitable contributions: If you have a favorite charity, you can designate some of the proceeds from your life insurance to go to this organization.
Insurance Settlements Amount How is the settlement amount determined? The settlement amount depends on which type of policy you have.
Having inadequate insurance can affect the amount of compensation you get.
Replacement Cost and Actual Cash Value: Replacement cost provides you with the dollar amount needed to replace a damaged item with one of similar kind and quality without deducting for depreciation-the decrease in value due to age, obsolescence, wear and tear and other factors.
An actual cash value policy pays you the amount needed to replace the item minus depreciation.
Suppose, for example, a tree fell through the roof onto your eight-year-old washing machine.
If you had a replacement cost policy for the contents of your home, the insurance company would pay to replace the old machine with a new one.
If you had an actual cash value policy, the company would pay only a percentage of the cost of a new washing machine because a machine that has been used for eight years would be worth less than its original cost.
Suppose, also, that the tree damaged your 15-year-old roof so badly that it had to be completely replaced.
If you had a replacement cost policy, the insurance company would pay the full cost of installing a new roof.
If you had an actual cash value policy, it would pay a smaller percentage of the cost of replacing it.
Extended and Guaranteed Replacement Cost: If your home is damaged beyond repair, a typical homeowners policy will pay to replace it up to the limits of the policy.
When the value of your insurance policy has kept up with increases in local building costs, a similar dwelling can generally be rebuilt for an amount that is within the policy limits.
Some insurance companies offer a replacement cost policy that will pay a certain percentage over the limit to rebuild your home-20 percent or more, depending on the insurer-so that if building costs go up unexpectedly, you will have extra funds to cover the bill.
These are called extended replacement cost policies.
A few insurance companies still offer a guaranteed replacement cost policy that pays whatever it costs to rebuild your home as it was before the disaster.
But neither a guaranteed nor an extended replacement cost policy will pay for a house that's better than the one that was destroyed.