Elder Law

Senior Settlements – Is This the Right Option for You?

As a senior, you are likely inundated with offers that promise to make your life easier. Whether it’s an attempt to sell you a product or service to get you to sell your assets, the sales pitches never end once you reach a certain age. 

One such offer is known as a “senior settlement.” You may or may not have heard about this offer already. But for the sake of making sure everyone is on the same page moving forward, let’s briefly discuss what a senior settlement is and what it can do for you.

What Are Senior Settlements?

Do you have a life insurance policy that you feel you no longer need? You might have come across advertisements letting you know that you can sell your policy in exchange for cash. 

When you sell your life insurance policy, the process is known as a senior settlement. You will receive cash in exchange for your policy, and someone else takes over the policy and all that it entails. 

In senior settlements, life insurance policy owners sell their existing policies for cash. The buyer of the policy then bears the premium and receives the death benefit whenever the policyholder dies. 

It’s worth noting that the payout is lower than that of the death benefit yet higher than the cash surrender value of the policy.

How Much Is Your Policy Worth?

This portion of senior settlements can vary wildly. The exact amount you’re offered and given depends on things like your life expectancy and the size of your premium. 

Like any other type of business, life insurance companies and the industry as a whole only exist because it makes money. This is why investors put premiums on life insurance policies that are held by people who are at a greater risk of dying. 

This might sound a bit blunt, but it’s the truth. As such, you should consider the value in your policy and speak with a trusted attorney before committing to such a sale. 

Types of Senior Settlement Options

There are two typical options for senior settlements: life settlements and viatical settlements. Take a moment to explore these two options in greater detail, so you know what you can expect from them.

Life Settlements

Life settlements are designed for seniors over the age of 65 (typically) but with a life expectancy of 15 years or less. What’s more, these settlements are usually offered to individuals whose health has declined since buying their policy.

Viatical Settlements

A viatical settlement is another life settlement, but where the policyholder isn’t expected to live much longer. Viatical settlements are usually offered to seniors with terminal illnesses. 

As the public becomes more aware that they can choose to use life insurance policies as a financial asset, life settlements and viatical settlements for senior citizens are becoming more and more popular. In the life settlement industry, the number of elderly settlements accounts for the largest share.

Should You Take Advantage of a Settlement?

There are certainly many reasons for someone to get a life settlement. But there are just as many reasons to keep your existing policy. Therefore, it is important to understand the benefits and drawbacks of a life settlement. In doing so, you’ll be sure to make an informed choice. 

Whether you need guidance on selling your policy or you can’t make up your mind if it’s the right move for you, please be sure to secure the services of a trusted attorney.

Your lawyer will be able to help you in making the best decision based on your needs. It’s important that you weigh your options and determine whether your life insurance policy still holds the same value and need for you today as when you first got it. An experienced attorney in Florida who understands insurance and your rights can assist you here. 

Insurance policies have a lot of fine print that needs to be considered before you make a decision. At Doane & Doane, we understand the intricacies of insurance and law and will guide you every step of the way. So if you’re ready to speak with an attorney about selling your life insurance policy, we encourage you to call Doane & Doane today.

Contact Doane & Doane Today for Assistance 

Doane & Doane was founded in 2003 and continues to serve Southeast Florida residents and businesses through qualified legal counsel. In fact, Doane & Doane is one of the area’s most trusted and respected tax and estate planning firms. If you need assistance with trusts or senior settlements of any kind, we encourage you to contact us at 561-656-0200. Alternatively, you can always fill out our online contact form, and we will promptly respond to your inquiry.

The information in this blog post is provided for informational purposes only and is not intended to be legal advice. You should not make a decision whether or not to contact an attorney based upon the information in this blog post. No attorney-client relationship is formed nor should any such relationship be implied. If you require legal advice, please consult with an attorney licensed to practice in your jurisdiction.