Life settlements have emerged as a versatile investment avenue, offering various options tailored to different circumstances and financial goals. Abacus Life allows individuals flexibility when redeeming their life insurance policies for financial benefit. Below are the different life settlement options and how they cater to diverse needs.
Traditional Life Settlements
This is the most common type of life settlement. Traditional life settlements involve the policyholder’s sale of the policy to a third party, usually an investor or a company specializing in life settlements. The policyholder receives a lump sum payment, and the buyer takes over premium payments and becomes the beneficiary. Upon the insured individual’s death, the buyer collects the death benefit.
Viatical Settlements
Abacus Life Viatical settlements are designed specifically for individuals facing terminal illnesses. In this arrangement, individuals with a life expectancy of two years or less sell their life insurance policies to investors. The funds from the settlement can then cover medical expenses, enhance the quality of life, or alleviate financial burdens associated with the illness.
Senior Life Settlements
Abacus Life Senior Life settlements are targeted at older individuals who have outgrown the need for their life insurance policies. These individuals might have retired, experienced changes in financial circumstances, or have policies no longer aligned with their goals. By selling their policies, seniors can use the funds for other financial needs.
Retained Death Benefit Settlements
In retained death benefit settlements, the policyholder sells a portion of their life insurance policy while retaining some of the death benefit for their beneficiaries. This option allows individuals to access immediate funds while leaving a portion of the policy’s benefits to their heirs.
Hybrid Settlements
Hybrid settlements combine elements of life settlements with long-term care benefits. If the policyholder needs long-term care, they can access a portion of the death benefit to cover the costs, ensuring a dual benefit of protection and care.
Overfunded or Lapsed Policy Settlements
If a policyholder owns an overfunded policy (with excess cash value) or is at risk of lapsing due to high premiums, they can consider selling the policy. Overfunded or lapsed policy settlements allow policyholders to salvage value from policies that might otherwise go unused or be lost.
Split-Dollar Settlements
Split-dollar settlements involve two parties, an individual and an employer or business. They share the costs and benefits of the policy. If the arrangement changes, the individual can potentially sell their interest in the policy, providing an exit strategy.
Charitable Life Settlements
Charitable organizations can benefit from life settlements through charitable life settlements. In this option, a policyholder donates their life insurance policy to a charity, which can then sell the policy to an investor. The charity receives a portion of the proceeds while the investor assumes the policy’s ownership.
Summary
Life settlement options are diverse and cater to various situations and financial goals. Each option serves a unique purpose, from traditional life settlements to options specifically designed for seniors, those facing terminal illnesses, or even businesses. When considering a life settlement, it’s essential to thoroughly understand the available options, seek professional advice, and choose the one that best aligns with your financial objectives and individual circumstances.
