There are many reasons to consider a life settlement. Seniors are utilizing their stagnant life insurance policies to provide them with extra cash. It could be a life saver for you and your finances in retirement. It is an investment worth asking your financial advisor about.
The number of seniors that have debt in retirement is rising. In 2019, the Congressional Research Report found that the amount of debt in seniors ages 65 and older increased by over 20% in the past 30 years.
While the time period may seem strained, it reveals an alarming number of seniors struggling in retirement. Debt prevents seniors from living a fulfilling retirement.
Finding the cash in a retirement budget to pay for the unexpected additional debts accumulated can be difficult. A life settlement can provide the cash needed to pay off credit card debt and more so there is less worry and stress.
Rid You of Premiums
Premiums are what you pay month to month to keep your life insurance coverage. It can turn out to be an extra expense on top of priorities that are not always necessary.
The payout from the premiums that you pay over the years, referred to as a death benefit, is often not needed anymore by the policyholder. A life settlement rids you of the policy altogether and still allows you to get a significant amount of money out of it, rather than to lapse the policy and not receive anything.
If premiums begin to be a burden on your life, they can free up some much-needed cash.
Asset in Economic Downturn
While retirement is well sought after for many people, it can be unpredictable. You can only prepare for so many things in life until the unexpected happens.
This is especially true with the investment and stock market, for example. The recent downturn of the market due to Covid, for example, left many people stripped of their retirement savings and left to start over. For those who were already deep into retirement and without a source of income to recover, it was it.
Suppose it was difficult to find an alternative. If you find yourself in a bind and without the extra cash to suffice, a life settlement can serve as a form of income or financial replacement.
Filling the Gaps
Many baby boomers were not as prepared for retirement as they should have been. In 2019 the U.S. Government Accountability Office estimated that nearly 50% of people 55 and older did not have adequate retirement savings.
Having limited financial resources within retirement is what has forced many retirees back into the workforce. A life settlement can provide a source of cash to support long-term goals and fill gaps in retirement where seniors may not have been prepared.
Cover Rising Health Care Costs
It is no secret. The cost of healthcare is rising, and people have to find alternative ways to pay medical expenses, doctor bills, prescriptions, and more.
Even one doctor’s visit can be overwhelming, and there are not many options for people who have a strict budget but still don’t qualify for Medicaid. Health should be a priority.
No one should go without access to health care. A life settlement has proved to provide funding for seniors to cover these expenses. It is even helpful in paying for long-term care.
Help Your Business
Many seniors retire with a business still in operation. Sometimes, in order to keep that business going, additional funds are needed.
In other cases, it may be more beneficial to sell the company, in which case the insurance policies are in place to protect assets within the business.
In addition, once the business is sold, the insurance policies on those assets can be sold as well, providing more cash from the sale of a business than you may have originally intended.
Help With Life Transitions
Life continues after retirement; sometimes even a new chapter in life can begin for some. A life settlement can help in some of those life transitions, such as a growing family or education for loved ones.
Divorce is another major expense that senior couples are facing in retirement. Recent studies show that people aged 60 and older are divorcing at the highest rate in comparison to other groups, and it costs thousands of dollars. Whatever the case may be, a life settlement can get you the cash you need to move on.
Life settlements are becoming an increasingly popular option for seniors. While many do not know enough about the process yet, it is still valuable to know that your life insurance policy is an asset.
Whether you want to keep your policy intact or you need to collect its worth in cash, it is an investment worth having. In addition, life settlements are an alternative solution for many seniors with the right qualifications.