The article said:
“A “life settlement,” as a sale is called, may be an attractive option for seniors who determine they no longer need their life insurance policy…Policyholders typically sell their insurance through life settlement brokers to investment companies for lump sums that are usually several times greater than they would receive if they surrendered the policies to the insurance companies…”
I don’t claim to be an insurance expert; but since when did seniors stop needing their life insurance policy? I understand that many seniors are facing reduced income due to decreases in their 401(k)s but they should be cautious when selling their life insurance policies which can be complex and may not yield the return they expect or more importantly need. Currently, many of these “life settlements” only yield less than 20% on the value of the policy.
The biggest problem facing seniors is not just reduced income, it is also increased debt. Financial problems like foreclosure, high credit card indebtedness and even owning a vehicle that is too expensive can be remedied by negotiating with the creditors, seeking legitimate credit counseling and/or filing for bankruptcy. Life insurance is an asset for you and your beneficiaries, don’t part with it without first considering all of your other options.
Source: Dallas Morning News