About Settlements

Learn about the basics of Life Settlements, Viaticals and Retained Death Benefits: Basic Explanations

life settlements
February 22, 2023

What is a Life and Viatical Settlement?

A life settlement is a financial transaction in which a policyholder sells their life insurance policy to a third-party investor for a lump sum payment. The investor takes over the premium payments and becomes the beneficiary of the policy upon the policyholder’s death. A viatical settlement is a similar transaction, but it is specifically designed for individuals who are terminally ill. The proceeds from a life or viatical settlement can be used for a variety of purposes, but they often provide the policyholder with financial freedom and peace of mind during their lifetime. Some people use the funds to pay off debt, fund retirement, or cover medical expenses. Others use the proceeds to fulfill a lifelong dream, like traveling the world or starting a business. Whatever the use, a life or viatical settlement can be a powerful tool to help individuals take control of their financial future and create the life they’ve always imagined.

What is a retained Death Benefit?

Retained death benefit is an option for life insurance policy owners to retain a portion of the death benefit payout while the buyer takes over premium payments. In case of the insured individual’s death, the beneficiary receives their guaranteed percentage, while the fund receives the death benefit for the purchased portion. It’s particularly useful for seniors and the chronically/terminally ill, eliminating future payment obligations while maintaining a death benefit payout.

Is a settlement right for you?

If you’re considering whether to keep or sell your life insurance policy, it’s important to weigh the benefits and drawbacks of each option. While life insurance can provide a valuable safety net for your loved ones, there are many situations where selling your policy may be the better choice. If you’re struggling to keep up with premium payments or need a lump sum of cash to cover unexpected expenses, a life settlement can provide a much-needed infusion of cash. Additionally, if your beneficiaries no longer need the protection of your policy, selling it can be a way to turn that asset into real money that you can use to achieve your financial goals. It’s important to work with a reputable life settlement company who can guide you through the process and help you get the best possible payout for your policy. Ultimately, selling your life insurance policy can be a smart move that helps you take control of your financial future and live the life you’ve always wanted.

If you’re looking to take control of your financial future and achieve your long-term goals, now may be the time to consider selling your life insurance policy. A life settlement can provide you with a lump sum of cash that you can use to pay off debt, cover medical expenses, fund your retirement, or simply enjoy the lifestyle you’ve always wanted. With interest rates at historic lows, the value of your policy may be higher than you think, and a life settlement can be a powerful way to unlock that value and put it to work for you. Don’t let your life insurance policy go to waste – contact a reputable life settlement provider today to explore your options and discover how you can turn your policy into cash in hand.

Not every life settlement company is created equal. Consumers should ask themselves one question when considering a life settlement: Should I talk with a broker or a buyer?

Although direct buyers can settle transactions faster, they are not fiduciaries. A life settlement broker is a licensed fiduciary who works in the best interest of the client. Brokers save time by completing one application that is presented to multiple buyers to achieve the highest offers. Brokers ensure clients are treated fairly and only get paid a commission if a seller accepts an offer.

At Bridge, we are a licensed life settlement and viatical settlement brokerage with a mission to increase wealth for American seniors. As fiduciaries, our goal is to save you time by streamlining your application across top buyers and negotiating the highest settlement guaranteed.

Settlement Statistics

  • The global life settlements market is expected to reach $2.9 billion by 2027, growing at a CAGR of 10.4% from 2020 to 2027. (Source: Allied Market Research)
  • In 2020, the average life insurance policy sold in a life settlement had a face value of $3.9 million. (Source: The Deal)
  • About 90% of life insurance policies in the United States are projected to lapse without ever paying a claim. (Source: Forbes)
  • The life settlement industry has paid more than $5 billion to policyholders since its inception. (Source: The Deal)
  • The average life settlement payout is around 20% of the policy’s face value. (Source: Investopedia)

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