For many older Americans, financial problems threaten happiness. Boomers are finding that converting structured assets, annuities or an unneeded insurance policy into cash can be a remedy for the lean times that many are experiencing with this slow-to-recover economy.
Many of today’s older Americans:
- Are living longer: people over 85 are the second fastest growing segment of the population
- Many seniors reach lifetime maximum on health policies that no longer cover healthcare costs
- Have been paying for one or more life insurance policy for most of their adult lives
- Hold separate insurance policies bought to protect spouses and children
- Over three quarters of Baby Boomers hold life insurance
- Many seniors fear outliving their retirement savings
Many of the challenges caused by living longer than expected are easily addressed by a supply of cash. The good news is you are still alive! The bad news: most seniors do not have the cash needed to face later life living and health care costs.
In the past, a life insurance policy could only be turned back in to the issuer or let lapse. Life settlements provide a third option. Now seniors can take that extra life insurance policy and convert it into cash.
Life insurance settlements are a good option when:
- The beneficiaries are no longer living
- Children listed as beneficiaries are now grown and don’t need the policy
- Spouse is no longer in the picture due to divorce
- A policy bought to protect a debt is unneeded because the debt is paid
Converting that structured annuity of old life insurance into cash is a valid decision for more than filling someone’s stocking this year. It can also be a good investment decision because you have the opportunity to invest the money right away. Holding the policy ties the money up until you are gone.
Potential changes to estate tax laws is another reason for considering to cash out sooner rather than later. Many seniors are choosing to liquidate assets and bestow them upon their family while still living and witness the benefits of their generosity.