How Life Insurance Settlements Work

Finding the Cash Value of Life Insurance

In 1911, a sick patient was having trouble paying his hospital bills. He was terminally ill and had but a few more months to live. Fortunately, he had a life insurance policy which he wished to cash in for spare liquidity. The patient asked his doctor, who was taking care of him at the time, if the doctor could purchase his life insurance policy before death, and receive the benefits after he had died.

Trusted Life Settlement Company

The doctor, named Grigsby, agreed. Grigsby would pay the premiums on his patient’s life insurance and receive the death benefit after his passing. In exchange, the patient was able to get immediate financial help and turn this unused asset into cash. This was the first example of a medical patient that needs financial support without having to take a loan to get access to funds.

This was the background for the 1911 case of Grigsby vs. Russell, which it made it all the way up to the United States Supreme Court. After the trial, long after the sick patient’s passing, the Supreme Court established that life insurance policies possess all the ordinary characteristics of property. Therefore, Life Insurance Settlement Brokers could calculate the Value of Life Insurance Policies and offer policyholders the option of cashing out of life insurance policies.

How Do I Qualify for a Life Settlement?

Speak to a professional life settlement broker and receive a free quote on the value of your life insurance policy. Once we evaluate the cash surrender value of your insurance policy, we can let you know if you how/when you can liquidate your life insurance policy.

Life Settlements Are Cash For Life Insurance Policies

Similar to selling a home, a person with a life insurance policy can take advantage of their asset and be financially rewarded before the maturity date. Viatical settlements and whole life insurance settlements that provide cash settlements for life insurance policyholders are considered the same as transactions for private property. The 1911 case made it available for a policyholder to transfer their life settlement to a Life Settlement Company in order to benefit from the proceeds while alive. In the 1980’s the viatical settlements market emerged. Brokers would purchase the life insurance of AIDS patients who didn’t have long to live, and wanted immediate liquidity. The patients would get a better quality of life due to their increased finances as the brokers liberated them from having to pay monthly premiums. In exchange, the brokers and policy buyers received the face value of the policy. Now, this and terminally ill patients that need financial assistance are using viatical life settlements for the same reason.

Make Use Of Your No Longer Wanted Life Insurance Policy

Many people do not know the benefits that a life settlement organization like Life Insurance Settlements can offer. In fact, most seniors don’t know that they have this option but there and there are many reasons for selling your life insurance policy. Viatical settlements can be a valuable source of liquidity for people who would otherwise surrender their policies or allow them to lapse.

When you surrender your policy to your insurance company you will only get back your policy’s cash surrender value: pennies on the dollar. Similarly, when you allow your life insurance policy to lapse you are telling your life insurance company that you cannot pay your monthly dues anymore. The policy freezes (you are not covered) and your survivors will not be able to receive the death benefits after your passing.

The beauty of a life settlement is that you receive a lump sum cash payment GREATER than the surrender value your insurance company can give you. The amount you receive depends on three factors: your age, health and the terms/conditions of your policy.

A life settlement can make sense for you if you no longer want or need your current policy, or if you can no longer afford the expense of paying insurance premiums.

Start Your Life Settlement Qualification Process

Life settlements require qualifications that vary in every state. Work with one of our experienced life settlement brokers to find the cash value of your life policy and help you withdraw money from your life insurance.