Useful Insurance Information

There is always a person who will figure out how to make money out of anything, including someone else’s misfortune or even death. Death, of course, has a close connection to life insurance and life insurance is problematic in it’s own way - you have to die before you can collect it.

Now some people, including the insurance companies that originally sold you the life insurance policy, have figured out a way for you to get your hands on some of the money of your life insurance before you die. All you have to do is to sell the life insurance policy back to the insurance company or to anyone who makes an offer to but it. You will raise about half of its vale in cash. But now you will have money to burn and you are still here to light the fire!

The scheme is honest and you don’t have to fake your death as described in many detective novels. On the contrary you can now legally create vast amounts of cash - hundreds of thousands of dollars if not more - seemingly out of thin air without you having to do much than take a medical, signs some forms, receive the check, and then of course at some future date die at your leisure.

What this is all about is the concept of a "life settlement", and to understand that, you must understand what its immediate predecessor, the "viatical settlement". The viatical settlement was offered to anyone with a terminal disease, allowing him money from his life insurance policy before he died so that he could either pay for treatment or just have a great last fling.

Now we come to the life settlement. Assume that you have an “old” man who is 65 and had a significant decline in health, such as a stroke or major heart attack, but who once upon a time bought a $1 million life insurance policy. The old codger has since raided all the cash value out of the policy to fund his medical treatments and early retirement. Indeed, because of his age the cost of insurance is now rapidly increasing meaning that the old codger will either have to put more money into the policy or it will expire anyway. His problem is that he doesn't have any more money to put into the policy unless he borrows against the equity in his home or something, which he really doesn't want to do.