Being a senior doesn’t mean that you have enough money to live comfortably. Even if you have enough money saved up to live in relative comfort, unexpected expenses such as medical bills can pose a financial challenge.
You probably remember facing sudden financial emergencies in the past, but it was easier to handle back then because you were still working. Now you’re staring at a big pile of bills with no recourse in sight.
We’re here to tell you that there is a way out. If you are over 65 years and paying premiums on a life insurance policy, you have an option and may be able to sell your policy for a cash payout. It’s called a life settlement. If you’re unfamiliar with the term, worry not; we’re about to explain everything you need to know, including how life settlements are regulated.
What is a life settlement?
A life settlement is a transaction in which the policyholder of a life insurance policy sells the policy to a licensed third party known as a life settlement provider. Life settlements are considered a more favorable option when compared to the alternative of simply surrendering the policy to the insurance company or letting it lapse.
By selling your life insurance policy through a life settlement, you receive a one-time cash payment. Although a portion of the proceeds from the sale may be taxed (depending on the state you live in), you will still have a considerable sum to do with as you please.
Are life settlements regulated?
One of the most common concerns regarding a life settlement transaction is how they are regulated. The biggest concern for many seniors is losing their money, policy, or both without sufficient regulation in place. After all, a life settlement transaction isn’t something that someone does every day. Given the amount of money involved in most of these transactions, it is natural to be nervous. However, these transactions are perfectly safe when working with a licensed life settlement provider.
Life settlements are regulated, which makes them even more secure. These settlements are regulated primarily at the state level, meaning there is some variability from state to state. While there is some variability, most of the regulations in place have the same ultimate goal, which is to protect the seller.
What to know about life settlement regulations
Most state regulations pertaining to life settlements encompass rules like disclosure, waiting periods, and other restrictions. If you need to sell and you want to move things along quickly, some of the state regulations may seem somewhat bothersome. Keep in mind; however, these regulations are designed and enforced for your protection.
For example, many states have regulations stipulating that the insured seller must be presented with all offers and counteroffers. The purpose of such regulation is to ensure that the policyholder can maximize the profit from the sale.
Sometimes policyholders in certain states don’t even know that they can sell their policy. States with these regulations dictate that insurance companies must make policyholders aware that they can, in fact, sell their policy and are not obligated to surrender it back to the company.
States that regulate the sale of your life insurance policy
Currently, 43 states in the U.S. regulate life and viatical settlements. Those states are Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.
States that DO NOT regulate the sale of your life insurance policy
Alabama, Missouri, South Carolina, South Dakota, Wyoming, and Washington DC do not regulate viatical settlements or life settlements. If you live in any of these states, you can sell your life insurance policy without having to worry about any state regulations.
States that only regulate viatical settlements
Two states in the U.S. only regulate viatical settlements. Those states are Michigan and New Mexico. Viatical settlements are the sale of policies where the insured is terminally ill.
Why pursuing a life settlement is a good idea
So why exactly would selling your life insurance policy be a good idea? There are several compelling reasons why a life settlement isn’t just a good idea but a great one!
For one thing, the regulations that are in place in the majority of the states in the U.S ensure that you will be protected. If you need to pay those bills, visit the grandchildren more, buy a vacation home, you can use the proceeds however you want, and selling your life insurance policy is a great way to make it happen.
Partner with MRE Finance and sell your life insurance policy for cash!
MRE Finance specializes in helping seniors sell their life insurance policies that they either don’t want or don’t need. The most important aspect of selling a life insurance policy is ensuring that you work with a licensed provider.
MRE Finance is committed to helping seniors achieve financial freedom and live-in comfort.
Interested in selling your life insurance policy or learning more? Contact MRE Finance today! Click here and use the free life settlement calculator to find out what the value of your policy could be worth in minutes or call 1-800-521-0770. You’ll be glad you did.