3 Reasons Life Settlements Are Becoming More Attractive To Seniors
Americans have more choices today than ever—when it comes to which television shows to watch, where to service our cars, and where to get our news, clothing, and groceries. And the more informed we are about our options, the better our decisions will be!
But seniors seeking financial help during retirement should be just as informed about every viable option they have, including life settlement options.
Did you know that nearly half a million seniors lapse their life insurance policies? Also, as many as 90% of those 500,000 seniors wished they had known about their life settlement options, according to LISA, the Life Insurance Settlement Association.
The life settlement option, which can convert an unneeded life insurance policy into a windfall, is becoming better understood and more popular among the 65+ population.
As life settlements become more popular and the word gets out to policy owners about the potential upside of selling their life insurance policy, those who are qualified and can benefit from these transactions will continue to need more guidance about how to start the selling process.
In this blog we cover the three primary reasons for the recent surge in life settlements for the consumer and for the life settlement provider.
Reason #1: Scarcity of retirement funding.
Retirement funding is so important that most young adults make decisions regarding their late-in-life income in their ‘20s or ‘30s, putting away money each month so that they can have stability during their golden years.
Unfortunately, even those careful efforts often yield insufficient funds for the needs during retirement; one recent study showed that the number of Americans over 75 who filed for bankruptcy tripled from 1991 to 2016. More than 62 percent of the respondents in the study indicated that high medical costs were a key cause of the bankruptcy filing.
Reason #2: New tax laws.
Several provisions in the March 2018 Tax Cuts and Jobs Act have made life settlements a more favorable option, including the doubling of the exemption for the estate tax (to $11.2 million per individual and $22.4 million per couple), the addition of a new tax credit for non-child dependents and the inclusion of premiums in the tax basis, which reduces tax rates on life settlements.
The new tax code has allowed those who might not have previously qualified for a life settlement to reconsider their situation.
Reason #3: Better education about life settlements.
According to research from the Insurance Studies Institute, more than 500,000 seniors lapse their life insurance policy annually, but ninety percent of seniors polled reported that they would have considered a life settlement if they had been made aware of the option.
That statistic is likely to change, as life settlements gain a higher profile and financial advisors take seriously their fiduciary responsibility to make clients aware of the settlement opportunity.
Life settlements can convert an unprofitable life insurance policy into a valuable source of income for retirement, so seniors who have had a change in circumstances regarding their policy should certainly investigate a life settlement.
To make simple calculations that will allow you to determine your eligibility, use the calculator here provided by Magna Life Settlements.
If you're interested in receiving a personalized life settlement estimate or have questions about the process, call 714-271-2223 to speak with an expert.
Learn How To Sell Your Unwanted Life Insurance Policy For Cash
Your policy must have a benefit amount of $100,000 or more to qualify.
You can get a cash payout from your policy if it no longer serves a purpose for you. Choose a time on Allan's calendar below to get your free phone call consultation, plus get your free guide to life settlements emailed to you instantly.
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