(February 4, 2020) One of the most common concerns of a client is whether selling their life insurance policy is safe. With the current pandemic, seniors in the United States have been put on a financial burden to cover costs of medical care, income loss, and more. Understanding what the life settlement option can be a viable solution for those needing cash now.
Often times, clients ask: Are Life Settlements safe?
The answer is yes. Over the past decade, the market has become incredibly well regulated. Regulations depend on individual states’ basis. Accordingly, here at Abacus Life, we are proud to share that we are licensed for life and viatical settlements in many different states.
In the U.S. Supreme Court case, Grigsby v. Russell in 1911, life insurance was deemed to be personal property. In similar terms, just like an asset such as a car or a house, it is within your legal right to sell your life insurance policy. According to Forbes, ” The process has matured over the past 100-plus years. Today, third-party institutional buyers have emerged to acquire ownership of policies in exchange for paying the owner a lump sum of cash. In turn, the policy owner is no longer obligated to make future premium payments. The policy buyer then owns the life insurance policy, takes on the obligation of future premium payments.”
With the industry becoming well regulated, you can ensure your transaction here at Abacus Life is in safe hands. There are approved forms that must be used, and the company must provide you with comprehensive details concerning your transaction. It is important that a life settlement company makes sure you understand the entire process so you can make an informed decision.
Companies are required to protect the information and privacy of sellers and policyholders. That ensures that your personal information and medical records are protected.
There are three important steps to ensure your life settlement transaction is safe and protected.
1.Making sure the life settlement company you are working with provides you Confidentiality, Transparency, and Urgency.
Ensuring the company, you work with is reliable and safe is important for you to feel comfortable throughout the entire process. Life insurance is often a senior’s largest asset, so it is critical to have transparency.2.Knowing the state regulations in the state that the policy owner is located.
2. Make sure the company you work with is licensed in the state the policy owner resides in to ensure a safe transaction.
State regulations and licensing assure that you know the company is taking the necessary steps.
3. Understanding how personal and medical information is used by life settlement companies.
It is important to note whether the company you work with requires a HIPAA authorization form. It must state how information that is collected is used to ensure you feel safe about your entire transaction. Financial information must be secure as well. You’ve built equity in your life insurance policy. That policy is your property, not the insurance company’s. You have the power to decide how the policy should be used for you and your family. Deciding to choose life settlement is a legitimate and reliable choice to create financial options for your future. Life insurance is often a senior’s largest asset and one they can use to alleviate retirement challenges.