When
is it time to consider a Life Settlement?
Life Settlements provide policyholders with
an attractive new option of taking a policy that is no
longer wanted or sometimes not needed and turning it into
cash to apply to today’s needs. Here you will see
a few reasons to consider a life settlement.
If you are a policy holder that can no longer
pay the premium on your policy and are thinking about
either letting it lapse
or surrender it to the insurance company. A life settlement
would be a more lucrative option.
Others will consider a life settlement after they have
outlived their beneficiaries and have no real need to continue
to pay on a policy.
A Life Settlement can also be a more attractive
alternative than a 1035 exchange.
A 1035 exchange is a
provision in
the tax code which allows for the direct transfer of accumulated
funds in a life insurance policy to another life insurance
policy, without creating a taxable event. However, a life
settlement of the policy may provide more funds, even after
taxes, making it a superior option to the tax free exchange
of accumulated policy value.
You might also want to take your policy and use the funds
to donate to your favorite charity. This not only would
be a tax write-off but it will also allow you to see your
donation in action during your lifetime.
Has your health status has changed since your policy was
issued? This might also be a reason to consider a life
settlement.
Perhaps you no longer need a policy due to
a change in ownership of a company or retirement. A policy
bought
to finance a buy-sell agreement would no longer be needed
after one or more of the participants leave the business
or it has been sold. A Life Settlement can also be used
when an exit strategy is needed for split-dollar policies,
or
when an executive has left a company and informal funding
for deferred compensation plans are no longer required.
No matter what the reason, a life settlement
is always the better option then to allow your policy
to lapse or
to surrender it back to the insurance company.
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