Settlement is financial transaction between two parties namely the owner and the purchaser of the transaction
. Insurance settlements are also similar to this, in which the owner of the life insurance policy sells the unneeded policies to a third party for price more than cash value and less than its face value.
This sort of settlement is beneficial in case the policy holder opted to surrender or allowing to lapse, the insurance company will benefit. Insurance settlement is an alternative to surrender or lapse of a insurance policy, when the owner of the insurance policy is unable to pay premiums or the it is under performing or if the owner doesn't needs it any more.
With insurance settlements, the owner of the insurance policy receives the amount greater than the cash surrender value of the insurance policy and less than the full amount of the death benefit. In such situation the life insurance settlement companies become the owner of the policy and responsible for the payments of the future premiums at the same time it will receive the death benefit of the policy upon death of the insured person.
Here are some of the reason why one should consider selling life insurance policy to life insurance settlement companies only when
*The owner of the life insurance policy, no longer need it
*The premium payments of the policy is no longer affordable
*Already considering surrendering the policy
*Insurance Policy is already about to lapse
*Change in life insurer life circumstances
*Change in financial circumstances of the life insurer
Life insurance settlements convenience comes with a little fee. It should be paid to brokers or agents, who negotiates insurance settlement contract between the owner of the policy and the settlement company.
The amount the policy owner gets will depend on number of factors and they include
*The age of the life insurer
*The type of the insurance policy
*The death benefit
*Rating of the insurance company
*The number of premiums still needs to pay in order to keep the policy in state
*The amount of compensation that settlement broker receives
To get maximum out of your life insurance contact several life settlement companies before you finally sell. One thing that you should keep in mind is that as you provide all your information, it is very important that life insurance settlement companies keep your confidentiality.