Term Life Insurance Articles
Understanding How to Settle a Life Insurance Claim
2009-07-19
When a loved one dies, any life insurance that he or she has can be used to help the surviving family members. However, in order to obtain that insurance, a life insurance claim must be made.
The claim is required for beneficiaries to obtain the insurance that was purchased on behalf of the deceased.
A growing option in the life-insurance industry is life settlement, where an individual sells his or her life insurance policy to a third party in exchange for a sum of money now rather than at the time of death. The sum is less than the payout of the insurance at the time of death, which is where the third party makes its money. By giving a sum of money now and then collecting on the insured individual’s death, the third party makes money, which makes the life settlement an investment tool for some financial firms.
To make a life settlement happen, an insured individual normally talks with a financial consultant and, together, they decide to opt for the settlement. The individual’s insurance policy is then shopped to potential buyers, oftentimes through a broker, and the potential buyers make proposals for the insured’s policy. The buyers make their bids based on life expectancy rates and other factors. Once a buyer is decided upon, paperwork is completed transferring ownership of the insurance policy to the third party.
Trackers monitor the insured individual and are normally the go-between with the insurance company when the individual dies.
Viatical settlements are used when the insured individual is expected to have two years or less to live. Life settlements are used for individuals expected to have longer life expectancies.
Viatical settlements are provided in the same way as life settlements to extract money from life-insurance policies, and are often used by people facing high health-care costs and little hope of their life extending beyond two years.
Although regulations are in place for life and viatical settlements, there are still precautions that need to be taken before reaching any settlement. Don’t let anyone talk you into buying life insurance under the guise of a speculator, and then buying it from them. This is a scam.
For investors, there is the scheme of “cleansheeting,” where an individual partners with an investment firm to doctor his health records on paper, getting insurance he or she should not have gotten, and then selling it to an investor.
If a life or viatical settlement may be right for you, contact us today to determine your available options.
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When a loved one dies, any life insurance that he or she has can be used to help the surviving family members. However, in order to obtain that insurance, a life insurance claim must be made.
The claim is required for beneficiaries to obtain the insurance that was purchased on behalf of the deceased.
A growing option in the life-insurance industry is life settlement, where an individual sells his or her life insurance policy to a third party in exchange for a sum of money now rather than at the time of death. The sum is less than the payout of the insurance at the time of death, which is where the third party makes its money. By giving a sum of money now and then collecting on the insured individual’s death, the third party makes money, which makes the life settlement an investment tool for some financial firms.
To make a life settlement happen, an insured individual normally talks with a financial consultant and, together, they decide to opt for the settlement. The individual’s insurance policy is then shopped to potential buyers, oftentimes through a broker, and the potential buyers make proposals for the insured’s policy. The buyers make their bids based on life expectancy rates and other factors. Once a buyer is decided upon, paperwork is completed transferring ownership of the insurance policy to the third party.
Trackers monitor the insured individual and are normally the go-between with the insurance company when the individual dies.
Viatical settlements are used when the insured individual is expected to have two years or less to live. Life settlements are used for individuals expected to have longer life expectancies.
Viatical settlements are provided in the same way as life settlements to extract money from life-insurance policies, and are often used by people facing high health-care costs and little hope of their life extending beyond two years.
Although regulations are in place for life and viatical settlements, there are still precautions that need to be taken before reaching any settlement. Don’t let anyone talk you into buying life insurance under the guise of a speculator, and then buying it from them. This is a scam.
For investors, there is the scheme of “cleansheeting,” where an individual partners with an investment firm to doctor his health records on paper, getting insurance he or she should not have gotten, and then selling it to an investor.
If a life or viatical settlement may be right for you, contact us today to determine your available options.
