Life Insurance

Life Insurance Can Help the Living Also

As you grow older, your investments and your retirement savings continue to sustain you until reach a very advanced age.

One of the things that sometimes comes as a surprise to people that retired many years ago is that cashing out their life insurance policy is possible in many cases when they are facing a major medical expense, or they are starting to have failing health and would like to use the money to enjoy what is left of their life.

Source: http://online.wsj.com/article/SB10001424127887323419604578569883576547280.html

If you are looking at working with a company that takes over the payments on your life insurance policy and then receives the death benefit when you pass away, there are a few things to consider:

Taxes and Death are the two certainties.

In this case, your taxes will come long before your death, although the size of the tax bill may help hasten your impending death, due to the shock. Of course, each state has different tax structures and perhaps the main thing to remember is that by taking a cash payment from another company or person so that they can take over your life insurance maintenance and benefits means that you will likely end up with a hefty tax bill.

Someone else is rewarded when you perish.

For most people this can start out being a creepy thing. It was only several years ago that the US Congress changed the laws that used to allow US companies to become the beneficiaries for their top employees. If one employee died, then the company would collect as if they were a family member. After some strange deaths, the laws were changed.

Fortunately, it is a totally different environment when it comes to a life settlement. Sure, you are essentially turning over any benefits that you would receive to a third party, but you also walk away with a large cash payday.

Secondly, most companies that offer life settlements are very particular about the type of person that they are interested in working with. If you have 15 years left to live, you probably won’t find too many companies that are interested in working with you. If you have 2 years or less to live, on the other hand, you should be able to sell your life insurance policy to a solid company that will give you a good value for it.

There are a lot of details to work through

If you are approaching the end of your life and you are looking for a good way to cash out your life insurance policy in advance, you probably won’t like the amount of paperwork and detail that are involved in actually doing things.

To mitigate this, you should spend time online researching life settlements before you go out and meet with the company that you choose. Knowing more about the process will definitely help you to make solid decisions regarding your future.