Understanding Life Settlements

Life settlements allow a life insurance policy owner to sell an existing policy to a financial institution in exchange for an immediate lump sum cash settlement. The amount paid for the policy is a discounted percentage of the policy's net death benefit and represents the present day value of the policy.

The Life Settlement Process

Unlike most life insurance companies, life settlement Funders do not require the insured take medical examinations. However, life settlement funders require the settlement broker submit five years of the insured's medical records, The retrieval of these records are of no cost to the insured.

Typically it will take six to eight weeks to receive a life settlement bid. The settlement company reviews the insured's medical records for the past three to five years to determine a life expectancy.

When the life settlement policy owner accepts an offer, the settlement funder forwards a closing package. The closing package includes a contract detailing the life settlement transaction. Upon return of the life settlement contract the settlement funder moves the awarded money into escrow, and submits paperwork to the insurance company requesting change of ownership and beneficiary. A bank wire of settlement funds will be deposited within three days of beneficiary change. American Viatical includes a "Fifteen-Day Rescission" clause. if the life settlement insurance policy owner sends back all the money within fifteen days, the life settlement transaction will be voided and original policy returned. on Day Sixteen the viatical settlement transaction is complete.

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Life Settlement INdustry News 06/20/05

Life Settlements and Real Estate Investing Cash from Life Settlements can boost real estate holdings.Many seniors do not realize that there are no restrictions on the use of their Life Settlement proceeds...

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04/26/05

Premium Financing. Affluent insureds can use leverage to buy life insurance using recourse and non-recourse premium financing. After two years, the coverage may be sold as a Life Settlement, or retained....

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