In essence, a life settlement could help one prepare for retirement by providing a lump sum of cash in exchange for their life insurance policy that could be used to help fund the expenses that come along with retiring. A few notable ways that a life settlement could help prepare one for retirement include:
- Unlocking the cash value: If a life insurance policy has accumulated cash value, a life settlement offers access that value now, while the insured is still living, rather than later. Instead of surrendering the policy or allowing it to lapse, the insured can sell it to Abacus Life for a lump sum payment that is often 4-6 times greater the cash surrender value.
- Supplementing retirement income: The funds received from a life settlement can be used to supplement one’s retirement income. This additional cash infusion can help cover expenses, pay off debts, treat family, or support a desired lifestyle during one’s golden years.
- Eliminating premium payments: By selling a life insurance policy through a life settlement to Abacus, one can eliminate the ongoing premium payments that would otherwise have to continue to be funded. This would inevitably free up cash that can be redirected towards other retirement desires, like purchasing another home or funding a grandchild’s college tuition.
- Flexibility in investment options: Once the policy seller receives the lump sum from a life settlement, they have the flexibility to invest those funds as they see fit. They can choose investments that align with their retirement goals and risk tolerance, potentially earning a higher return on their money than if it remained tied up in a life insurance policy.
- Long-term care or medical expenses: As one ages, there may be a need for long-term care or medical expenses. The funds obtained from a life settlement can be used to cover such costs, ensuring there are necessary financial resources to maintain a comfortable standard of living during retirement.
Abacus Life always recommends consulting one of our life settlement professionals to help assess whether a settlement is the right option for an insured, based on their unique circumstances. To get started with selling a life insurance policy, a few qualifying factors will need to be considered, such as:
- Own a policy with a $100,000 or more in death benefit – anything less than that typically does not qualify, unless there are considerable health impairments
- Life insurance policies generally qualify if you are over age 70
- A decline in health from the time when the policy was issued may help better your chances to qualify, but it is not necessary
Because each life settlement case is distinctive, these factors should only be seen as general guidelines; each case is unique.
To see if a policy qualifies for a life settlement and help prepare for retirement, utilize our unique Life Settlement Calculator and speak to a representative at 800-561-4148. Our ultimate goal here at Abacus Life is to help every single person learn the value of their life insurance policy. We work to educate seniors so they know and understand that their life insurance policy has a fair market value. Knowing the value of a life insurance policy is as important as knowing the value of a home, equity portfolio, or general finances.