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Your Life Insurance
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Bad Credit Home Loan To Get You Out Of Debt
A "bad credit home loan" can help you climb your way out of debt and get you started back on the road to upstanding, good credit. There are many lenders who are willing to make bad credit home loans to you - a loan based on your equity in your home even if your credit has slipped or isn't as perfect as it could be. By taking out a bad credit home mortgage or home equity loan, you can consolidate a... Read article
Bad Credit Home Loan To Get You Out Of Debt
A "bad credit home loan" can help you climb your way out of debt and get you started back on the road to upstanding, good credit. There are many lenders who are willing to make bad credit home loans to you - a loan based on your equity in your home even if your credit has slipped or isn't as perfect as it could be. By taking out a bad credit home mortgage or home equity loan, you can consolidate a... Read article
Your Life Insurance
Many seniors own life insurance policies that they no longer need or want, or that they can no longer afford. Often, they allow their policies to lapse or cash them into the insurance company for the surrender value. What many seniors don't realize is that their unwanted life insurance may be worth much more if sold to an investor in a life settlement. A Life Settlement is the sale of a life insurance policy by the policyowner, before the policy matures. Such a sale, at a price discounted from the face amount of the policy, but in excess of the cash surrender value, provides the seller an immediate cash settlement.
Life Settlement History
Life Settlement industry evolved out of Viatical Settlements.
In the mid-80's AIDS became an epidemic, A number of AIDS patients were told that they only had a limited time to live. Many of these patients owned life insurance policies. They knew that when they died, their family would receive the death benefit but they needed money today to pay medical bills or enjoy the rest of their lives. In stepped Viatical Settlement companies. These companies purchased policies on terminal patients and sold them as retail investments to individual investors. The AIDS patients got money they needed today and the investors got the promise that when the patient died they would get the death benefit.
The Life Settlement Market
In the 90's the Life Settlement market was born as companies and investors turned towards buying unwanted life insurance policies from seniors. According to Sanford Bernstein, the industry grew from $0 in the mid 1990's to approximately $13 billion in 2005. Bernstein estimates the life settlement market will reach $160 billion over the next several years. The penetration rate is expected to exceed 20% as awareness and the size of the market is increased over the next 20 years.
Life Settlement Case Studies
Below are some real life case studies that illustrate ways that others have used life settlements to increase their net worth:
Case 1: Settlement Frees up $966,000 in Cash for Annuity purchase
This case involved an 82 year old female who owned several policies totaling $4.6 million. She no longer wanted to pay premiums for the insurance and was going to accept the cash surrender value of $236,548. Her intent was to use the policies' cash value to help fund the cost of an assisted living facility.
Her advisor recommended a life settlement for each policy, and she agreed. Ultimately she received a settlement of $966,000 - more than 400% greater than the cash surrender value - and used those funds to purchase an annuity. The annuity payments now help cover the costs of the assisted living facility.
Case 2: Settlement Proceeds Stabilizes Trust
This case involved an 81 year old female, owner of a $5 million life insurance policy with a surrender value of $196,866. Since the insured had lost interest in maintaining the policy and no longer wished to make gifts to the trust for premium payments, the cash surrender value was rapidly depleting as premiums were being deducted from the cash value. Working with her financial advisor they conducted a review to determine whether the policy should be surrendered or whether a Life Settlement would be more advantageous. The advisor provided an offer of $556,000 - over three times the cash surrender value.
Case 3: Settlement Allows Policyowner To Purchase Paid-Up Policy
A 78 year old male decided to allow his $1,250,000 policy to lapse. He had significant medical expenses and could no longer justify the $39,536 annual premium. After reviewing the available options with his advisor they decided to pursue a Life Settlement. He was able to secure an offer of $490,000. The policyowner and advisor decided to use some of the proceeds to purchase a paid-up $500,000 policy and the remainder helped to ease the burden of the policyowner's medical costs.
Case 4: Policyowner Makes $797,000
- A 74 year old in good health purchased a $10mm Life Insurance Policy. He paid-$536k for two years of premiums. After the policy is two years old, he sold the policy for $1,333,333 in the secondary market representing a $797,000 profit on his investment.
If you are 70 and over, and have an insurance policy that you were going to get rid of anyway, you owe it to yourself to explore whether a life settlement might be a better option.
Matthew Tuttle, CFP®, MBA, is President of Tuttle Wealth Management, LLC, in Stamford Connecticut. He is also the author of "Financial Secrets of my Wealthy Grandparents". For more information, or to sign up for his free newsletter please visit http://www.matthewtuttle.com.
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP®, Certified Financial Planner and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
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Dental Insurance
Dental insurance is not included in so many of the benefit packages we receive at work. Yet all of us have dental needs, if only for an annual cleaning. Dental expenses can definitely add up. A crown here, a filling there and the next thing you know, you've spent a thousand dollars. Most company plans for dental don't cover a whole lot, anyway.
My company doesn't cover dental. There isn't even an optional package for that, so I'm on my own. I've been searching the web for dental insurance. Do you know there are nearly 10 million web sites about it? I'm just overwhelmed. I've also found a few that are not exactly insurance, but some kind of alternative dental plan. One of them is dental-savings.com They seem to cover everything, with no deductibles, no claim form and no limit on pre-existing conditions. Another one like it is at dentalplans.com
I've been looking at the alternatives, but I'm also checking with known insurance companies. I have friends who are self-employed and many of them have plans they like. Someone told me about ehalthinsurance.com as an option. Seems like there are a lot of places offering dental insurance to the self-employed. Maybe those will help me, too.
I think the best thing to do is to research carefully before paying for coverage. Talking to my friends and getting recommendations is helping, too. Some of them have had less than optimal experiences with their providers. I know every company has trouble sometimes, but if I can save myself some trouble by avoiding a company my friend had trouble with, I will. There are still plenty of other places to choose from.
Most likely I'll make my decision when I hear good reports on a company from more than one person. That's what it will take to convince me I'm making the right choice. I think it's worth taking my time about it. Don't you?
Amy Mettarod writes for Dental Insurance. You can read more free articles at Dental Insurance Articles.
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