With the new year, it is important to refresh what you should know about the life settlement industry. A life settlement is the sale of a life insurance policy to a third party for cash. Typically performed by individuals age 65 and older, a life settlement will always exceed the cash surrender value of your policy, but it will always be lower than the death benefit of your policy.
State regulations are set in place to make this transaction a safe and viable option for seniors. According to ThinkAdvisor, 90% of U.S. citizens live in states with laws and regulations that protect seniors and their loved ones when the seniors are selling their life insurance policies. Life settlement companies must be using approved forms and must have extensive communication about the transactions involved with the policy owners.
At Abacus Life, we empower you with the information you need to decide if selling your life insurance policy, or a portion of it, is right for you. We will walk you through the entire process so you can make an informed decision for your family’s financial future. You can see the many states that we are licensed for here.
85% of term policies and 88% of universal life policies will expire, lapse, or be surrendered before a death benefit is paid. Those are lost dollars for the policyholders and learning about the option of a life settlement could change that. 90% of seniors would have considered a life insurance option if they knew it existed.
Abacus Life can pay policyholders 4X more on average than the cash surrender value.We do not want our clients to “settle,” we want to help them find real value in their personal property. Whether you are interested in a traditional life settlement, retained benefit option, or a hybrid option, Abacus Life can help you identify the right option for your circumstances.
Over the past five years, the life settlement market as an industry has multiplied vastly both in funds to purchase policies and consumer awareness. A 2019 report from The Deal showed a 28% increase in policies sold in 2018 compared to 2017, while the face amount of life insurance policies sold increased by about $1 billion, to an impressive $3.8 billion. Unfortunately, there are still many that are not familiar with life settlements which put them most at risk for lapsing or surrendering their life insurance for less than it is fully worth.
Life Settlement Trends Heading Into 2021
Treasury Secretary Steven Mnuchin said recently that the current pandemic presents “a great investment opportunity.”Even with the current COVID-19 pandemic going on, considering a life settlement offer could be the solution for many policyholders especially if recent income loss, retirement loss, and medical care cost have put them in a situation where they need cash now.
At Abacus Life, we empower you with the information you need to decide if selling your life insurance policy, or a portion of it, is right for you. We understand that you, like many other people, may have a policy that no longer meets its goals. We are dedicated to helping you learn the facts about your life insurance options so you can make an informed decision and get the most out of your policy. We are committed to serving you with the confidentiality, transparency, and urgency you deserve.