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Corporate Life Insurance Settlements
Posted on October 17th, 2009 No commentsAuthor: Ross Bainbridge
Source: articleage.comLife insurance settlement is the purchase of the existing insurance policies from the policyholders at a fixed percentage of the total cash value of the policy. This can be taken advantage of by a senior citizen who thinks that his or her policy is no longer needed, or by a terminally ill person who is in bad need of money for meeting expensive medical treatment. If policy owners observe that their insurance policies are not performing well in the market, they will sell the policies to third parties generally life insurance settlement companies or brokers. The sole business of these organizations is nothing but purchasing existing insurance policies. A corporate life insurance settlement is obviously the life settlement of the insurance policies purchased by corporate employers for covering employees’ retirement plans.
The frequently used insurance by corporations is Corporate Owned Life Insurance (COLI). It is a life insurance policy purchased by a corporate employer to offset the fringe benefits of one or more employees under retirement schemes. So obviously, the corporate employer will pay all the premiums of the policy and will be the owner and the beneficiary of it. Normally employers will opt for corporate owned life insurance policies for discharging financial obligations under the employees’ retirement health benefit plan. The cash value of the policies is used by the employer for meeting the after-tax health insurance premiums for the retired employees.
However if the employee dies, the corporate employer will be in a position to cover a part or the whole amount of the plan out of the death benefit of the plan. Sometimes the amount so obtained can be used by the employer to pay the premiums on the other policies relating to other employees. If the employer thinks that the corporate life insurance is no longer needed, he will choose the option of corporate life insurance settlement with the outside parties. There are some online companies like American-Viatical.com who help the holders of corporate life insurance policies in the settlement process. The company diagnoses the true and fair market value of the policy and assists the policyholder for the smooth settlement of the corporate-owned life insurance policy. The company has not put any upper limit on the policy size of the life insurance settlement.
Life Insurance Settlements provides detailed information on Cash Life Insurance Settlements, Corporate Life Insurance Settlements, Life Insurance Settlement Loans, Life Insurance Settlement Options and more. Life Insurance Settlements is affiliated with Insurance Settlement Loans.
Article Source: http://EzineArticles.com/?expert=Ross_Bainbridge -
Why Bother With a Life Insurance Settlement?
Posted on October 14th, 2009 No commentsAuthor: Peter Crump
Source: articleage.comA life insurance settlement is the amount of money your beneficiary collects when you die during the term specified under the life insurance policy. The premiums you pay depend on the type of life insurance and the amount of the settlement you want to have if and when the life insurance company has to pay out. You might get a life insurance policy a lot cheaper if you opt for term life insurance because there is a possibility that you will never get to collect the life insurance settlement.
Settlements have become a very important factor in the estate planning process for seniors. Prior to the life insurance settlement industry, if a senior owned a policy that was no longer wanted, needed or could afford, there was no option but to lapse, cancel, or surrender the policy back to the carrier for the cash surrender value. Senior life insurance policies allow qualified policyholders to liquidate a policy for an amount much higher than the cash surrender value. Then, these seniors can take advantage of important financial opportunities using the proceeds of an unneeded or obsolete life insurance policy.
There are two types of life insurance settlement transactions: One kind creates immediate liquidity from a non-performing asset, allowing policy owners to cash out of unwanted, unaffordable or obsolete life insurance policies insuring a senior over age 65. The other is a Viatical settlement, which enables someone facing a terminal illness to utilize the present day value of their life insurance policy to ease the financial burdens that can be caused by the high costs of medical care. Knowing that there are options on how to receive a settlement with senior life insurance can take off some stress in a stressful situation.
Over the past few years, life insurance settlements have gained popularity among the financial planning community as the financial benefits to policyholders have become far too beneficial to ignore. As this industry continues to grow, many financial professionals have begun to recommend this financial service to their friends and families. This enables more and more life insurance policy owners to access the unrealized equity built up inside an asset that is normally considered only as a future benefit. Thus, it has become much more than a settlement that is used at the time of death.
By being informed on your life insurance settlements, you can help turn a policy on the verge of cancellation, surrender or lapse, into an immediate cash settlement. It’s a true win win opportunity!
A life insurance settlement is an important event.
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