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Wealth ... Money Management

Life Settlements: An Introduction

By Jerry Iwanski – Alternative Senior Financing

As you may know, most seniors need more money to live comfortably through their golden years. This is especially true when faced with unforeseen expenses such as assisted living and long-term care. The urgency of finding a significant amount of money quickly exacerbates an already stressful, emotional situation. For these seniors, the options can be bleak. The answer, a Life Settlement.

A life settlement is a powerful financial tool that allows you to convert your life insurance policy into cash. In a typical scenario, a bank or financial institution will purchase the policy, become the owner and beneficiary, and take over the premium payments. You are released from any obligations and are free to use your settlement money for anything you like.

Why has this become a popular solution?

People are living longer and want to do more during retirement. They have seen their net worth decrease in this current economic recession. A Life Settlement gives you the option to choose. Choose to take that dream vacation, send your grand kids to school, pay for Long Term Care or Assisted Living.

Many people find that as they reach retirement age, pay off their mortgage or see their children through college, their life insurance has served its primary purpose - to protect loved ones and assets — and is no longer useful. It effectively becomes a “dormant asset.” At this point, the expensive premiums are being directed toward an investment that is under-performing. Freeing up the money and eliminating the premiums creates greater financial freedom and new options for you and your family.


Life settlements provide an excellent opportunity to help you enjoy assisted living without financial pressures. With a life settlement, you can obtain the funds you need to finance your senior living and long-term care expenses.


Many people don’t think of their life insurance as an asset. Once they secure coverage, they often pay the premiums and give little thought to the policy as an investment. It assumes an invisible role in their financial portfolio or is regarded as an expense that must be kept up. But by the time you near retirement, your policy has become a solid asset with years of equity. It’s money you can use today.

Who Qualifies for a Life Settlement?

The typical age to do a Life Settlement is 65 years and up. Depending on some circumstances the age can be lower. The types of life insurance policies that can be sold are term as long as they are renewable or convertible, whole life, universal, joint survivorship. The policy must have been in place for at least two years. The typical minimum death benefit is $100,000 but again, depending on some circumstances it can be lower.

The Process

It typically takes about 4 to 6 weeks to complete the process. Paperwork must be completed by the policy owner and the insurance company. While no medical exam is required a brief medical history is needed and sometimes medical records must be requested. The policy is “auctioned” to several investors and they make offers based on the information. The offers are then presented to the policy owner, where they either agree or decline the offer. Once the policy owner agrees, money is deposited into an escrow account. When all paperwork is completed and signed, the money is transferred into your account.

What’s next?

Too few people know about the life settlement option. I hear from families every day who have let a policy lapse, or are about too, and they lose out on their opportunity to receive money that could help their loved ones during a time of crisis. Before you let your policy lapse or surrender it, check into a Life Settlement to see how much your policy is worth. There are no out of pocket fees to do a Life Settlement and there is no obligation to continue even after you find out what you can get for your policy. So you have nothing to lose.

About the Author

Jerry Iwanski has over 3 years of experience working with Seniors in the Insurance and Financial Services Industry. As a Life Settlement Advisor he offers Seniors an alternate funding option for housing, health care, other investments, new life insurance policy and charitable giving. He is licensed in Life, Health, Property and Casualty and Annuities. He is also a Colorado Certified Long Term Care Advisor.


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