by Guest » Mon Feb 01, 2010 12:16 pm
I need cash and my agent has suggested that I go for a life settlement. My son (the beneficiary) was partially disabled but now he's started earning again. Is there a better way out? I just wish to keep the policy for my son.
Posted: Mon Feb 01, 2010 09:37 pm Post Subject:
Lots of questions to answer....
1. How old are you?
2. What is the general state of your health?
3. Do you have a term policy, or a permanent policy (whole life or universal life)?
4. If it's term, is there still a conversion option available?
5. If it's permanent, do you have any cash value?
6. How much is the coverage for?
7. How much coverage do you want to keep?
8. How much cash do you need?
You might be able to sell part of the policy and keep the rest, but there's a lot of factors to take into consideration here. I just recently put up an article about life settlements on our website - feel free to take a look: http://www.terminsurancebrokers.com/life-settlements
Posted: Tue Feb 02, 2010 07:15 am Post Subject:
Yes, I have a permanent life policy and I have the cash value. I'm 57 and I'm not too sure if this is the right age to go for a life settlement.
Posted: Tue Feb 02, 2010 12:31 pm Post Subject:
Unless your life expectancy is less than 8 years (e.g. already have cancer, just had major heart attack, etc) , you probably won't get any offers at age 57. Have you discussed taking a loan against the policy's cash value if you need some money now? Is this a universal life or whole life policy? If you do take a loan against the policy, make sure your agent fully explains the possible ramifications. The fact that he suggested a life settlement for you at age 57 makes me wonder though...
Posted: Wed Feb 03, 2010 07:04 am Post Subject:
Yes, I'd suffered from a major cardiac arrest when I was 44. It's been 13 years now and I'm perfectly alright!
Of late I've become a bit scared about my son (ever since he got disabled). I've told my agent about how I was struggling to make ends meet and why I was not too sure of a consistent loan repayment. But, I also feel I should leave the cash value for my son, and for your information - it's a WL policy.
Posted: Wed Feb 03, 2010 01:16 pm Post Subject:
If it's been 13 years since that, your life expectancy is probably beyond 10 years. It would be pretty difficult to get any offer at this point, the life settlement companies are getting incredibly picky about their offers. If you've had this policy for a long time, keep in mind that you may never be able to get a standard risk classification or better again with the history of heart disease at such a young age.
Posted: Wed Feb 03, 2010 09:39 pm Post Subject:
Definitely listen to the advice you've been given by dgoldenz; he is right on target. Chances of a good life settlement offer are low. If you need funds that's what the cash value component of your life policy is intended for.
Posted: Thu Feb 04, 2010 07:25 am Post Subject:
If it's been 13 years since that, your life expectancy is probably beyond 10 years.
How do these life insurance carriers calculate my life expectancy? I thought my life expectancy would be some 7-8 years. :)
Definitely listen to the advice you've been given by dgoldenz; he is right on target.
Surely, he seems quite knowledgeable in this respect!
Posted: Thu Feb 04, 2010 03:55 pm Post Subject:
They calculate your life expectancy based on your medical history, current height/weight, smoker status, parent history of cancer/heart disease, etc. It is determined by actuaries. I'm not an actuary, but I would venture to guess they would say your current life expectancy is 15-20 years if you are fully recovered from the heart problems and haven't had any additional complications since then.
As BNTRS said, you can take a loan against the cash value of your policy. Just make sure your agent explains how everything works so you don't get stuck holding the bag later on.
Posted: Fri Feb 05, 2010 05:41 am Post Subject:
There are two things that I wish you'd explain to me. First of all it's not quite clear to me why I'd need to have a life expectancy less than 8 years to be eligible to get any offer.
Another thing- now that I'm doing well for the last 13 years, how will my parent history affect my life expectancy!
Posted: Fri Feb 05, 2010 06:08 am Post Subject:
Life settlement buyers are just investors. Those investors want a return on their money. If it takes the investors 20+ years to get their money, their rate of return is much lower. They want you to die the day after the policy is bought to get the biggest return. If your life expectancy is too long, they won't offer you anything because they see it as a bad investment. There are plenty of people age 70-75 willing to sell their policies too, and they all don't have a 20 year life expectancy.
Your family history changes your LE if you had any parents/brothers/sister with cancer or heart disease before age 60. It's just another risk factor used to determine your LE.
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