Seniors can learn how to turn unwanted life insurance policies into cash

Although more Americans are selling their life insurance policies these days, a life settlement is still unexplored territory for many seniors. However, just like your home, car or other assets, life insurance can be sold or transferred to new ownership-unlocking the vault to instant cash that would have otherwise been reserved for the beneficiaries of your policy after your death. If you're interested in such a transaction, the following is a brief guide to the life settlement marketplace.

What is a life settlement? A senior life settlement is the sale of a life insurance policy to a third party. According to Advanced Settlements, one of the leaders in the industry, the policyholder sells the policy for a cash payment that is less than the full amount of the death benefit, yet higher than the cash surrender value. The buyer becomes the new owner and receives the full amount of the death benefit when the original owner dies. As the new owner, the buyer is responsible for paying all future premiums.

How do I qualify for a life settlement? An ideal candidate for senior life settlements insurance is 70 years of age or older, has a life expectancy of less than 12 years, and has owned a life insurance policy with a face value of $250,000 and for more than two years.

What types of policies qualify for a life settlement? The following types of policies are accepted: Universal life, term life (if convertible), whole life, variable universal life, survivorship (if any).

What criteria are used to determine the value of a life settlement? When it comes the value of a life settlement, Advanced Settlements takes into account the following factors: the gender, age and medical condition of the policy holder; the size of the policy, cash value, loans, ownership structure; premium costs; life expectancy; and cash surrender value.

Seniors experiencing tough economic times should consider life insurance settlements. For additional information and to determine whether you're a good candidate, contact a life settlement broker. Life settlement brokers can help policyholders receive the highest possible amount for their life insurance settlements.

By Sarah Michaels

Sarah Michaels is a writer who resides in Cleveland, Ohio. Her work has appeared in numerous print and online publications.