More people are floating around the idea of selling life insurance policies. There are a number of reputable policy buyers out there willing to pay money for policies that no longer serve their purpose or are simply too costly to keep around.
More people are floating around the idea of selling life insurance policies. There are a number of reputable policy buyers out there willing to pay money for policies that no longer serve their purpose or are simply too costly to keep around.
The idea might sound too good to be true, which is probably going to make some of you a little suspicious. This is understandable; no one wants to be taken advantage of.
You want to learn if this is a good thing for you or your loved one. The following guide to understanding viatical settlements should help you get a better understanding.
Understanding Exactly What A Viatical Settlement Is
It is easy for consumers to feel uneasy when you hear about viatical settlements. However, the history behind such settlements has its beginning dating back over one hundred years ago. In the very early 1900s, a man named John C. Burchard needed a medical operation but could not afford it.
Burchard approached his doctor, Dr. A. H. Grigsby, and offered to barter his life insurance policy to Grigsby in return for his operation, $100, and a promise that the doctor would pay his remaining premiums. Dr. Grigsby agreed.
However, when Burchard passed away and Grigsby attempted to claim the settlement, the executor of Burchard’s estate contested its legitimacy. After Dr. Grigsby won a legal battle with the executor on the state level, they took it all the way to the Supreme Court.
In 1911, the Supreme Court made a judgment on behalf of Dr. Grigsby stating that the insured had a right to sell their policy to a third person other than the person who was in charge of the deceased person’s estate.
The case of Grigsby v. Russell, 222 U.S. 149 (1911) ultimately paved the way for the life insurance policy industry. The industry, however, exploded during the 1980s during the height of the AIDS epidemic.
Since most of those infected with the disease were young, unmarried, and without children, AIDS patients who were facing a short life expectancy chose to sell their policies so they could do something useful with the money before they passed.
Since then, viatical settlements have gotten further consumer attention as more people become aware of their existence and how they can help those who are terminally or chronically ill enjoy life a little.
Financial Realities Are Hitting Home
The next thing one should do is make sure they are honest and open about their financial situation. One of the main reasons people decide to sell their life insurance policies is simply because financial necessities force them to. It is important that these realities are explored when considering viatical settlements.
Obviously, people tend to invest a lot of money into life insurance policies over time This means that they take what happens to that policy and the money that comes from it seriously. The problem is that terminally ill individuals may have a number of unexpected issues, like long-term care costs or a drop in income, which could make the policy premiums a little harder to keep up with.
Your loved one is wise enough to see that selling might be the best solution at this point. Being able to express your concerns about his or her finances without feeling strange or awkward should go a long way towards helping your loved one understand why this option should be seriously considered.
Don’t Go at It Alone If You Don’t Have to
There is no need to talk to your loved one about this complex financial decision alone. You can contact a life settlement broker, a financial advisor, and you can even talk to a certified CPA to help your loved one understand his or her options regarding their policy.
For those going through with a viatical settlement, they will be receiving a large amount of money at once, so it might be a good idea to talk to financial experts to help manage this sum wisely once it is received. These types of settlements can be done online as well, making it fairly easy.
The idea might sound too good to be true, which is probably going to make some of you a little suspicious. This is understandable; no child wants his or her parents or grandparents to be taken advantage of.
You want to learn if this is a good thing for your loved one, and you want to learn how to talk to him or her about it. The following guide is meant to help you do just that.
Make An Effort To Learn About Settlements
It is easy for seniors and even you to feel uneasy when you hear about life settlements or what they can do for your family.
The idea that a life insurance policy can give you a substantial amount of money sounds incredible, and you have the right to be troubled. Most people know that seniors are targeted by fraudsters, but the reality is that this is a real and legitimate market that does pay good money for policies as long as they meet certain requirements.
This is the reason you should do your best to learn about the types of settlements and how they can help your loved one. You should consider consulting with a life settlement broker to learn more about the requirements and the kind of cash your loved one can expect. The more you learn about this market, the less apprehensive you might be.
Becoming knowledgeable about this should make it easier to explain to your loved one, who will likely be hungry for some clarification.
Financial Realities Are Hitting Home
The next thing you should do is make sure you are honest about your loved one’s financial realities. One of the main reasons people decide to sell their life insurance policies is simply because financial necessities force them to. It is important that these realities are explored when talking to your loved one about these settlements.
Obviously, this policy is one that your loved one has been putting money into for a long time. This means that he or she may actually hold the policy dear as probably being one of his or her smart money decisions. The problem is that seniors may deal with unexpected issues, like long-term care costs or a drop in income, which could make the policy premiums a little harder to keep up with.
Your loved one is wise enough to see that selling might be the best solution at this point. Being able to express your concerns about his or her finances without feeling strange or awkward should go a long way towards helping your loved one understand why this option should be seriously considered.
Don’t Go At It Alone If You Don’t Have To
There is no need to talk to your loved one about this complex financial decision alone. You can contact a life settlement broker, a financial advisor, and you can even talk to a certified CPA to help your loved one understand his or her options regarding their policy.
Your loved one is going to get a hefty sum, so it might be a good idea to talk to financial experts to help him or her manage this sum wisely once it is received should your loved one go through with it. These types of settlements can be done online for you and your loved one’s convenience.
Hopefully, this information helps you talk to your loved one about this policy that may only be a burden to him or her. Try to have this conversation when you are ready so that you do not confuse your loved one.
