Should Your Parents Sell Their Life Insurance?

Green Settlements Staff

Table of Contents:

  1. What You Need to Know About Life Settlements
  2. When Is the Best Time to Sell?

As your parents grow older, several transformations will occur that can have an effect on everything from their health to their finances. Sometimes seniors need help making decisions about their future, and they frequently rely on their adult children to assist them with these major life changes.

All too often, older adults don’t have enough financial support to make it comfortably through retirement, and this is a common concern among many older Americans. In a survey conducted by Bay Alarm Medical, seniors were asked to rate their anxieties and concerns about aging. While death didn’t even breach the top three reported fears, worries about money did, with eight in 10 participants indicating that financial instability was at the top of their list.

If one or both of your parents falls into this category, there are actions you can take to guide them toward a more stable financial future—and the life settlement marketplace can be a great first step.

What You Need to Know About Life Settlements

Life settlements work best for policyholders who are at least 65 years old and who own a term, whole or universal life insurance policy with a face value of at least $100,000. If your mother or father meet these basic criteria, they may be eligible to sell their policy in exchange for a life settlement. Prospective buyers will need basic information about the insured’s policy and their current health status, so you may need to assist your parent in retrieving medical records or answering a few general health-related questions.

When Is the Best Time to Sell?

It’s helpful to begin the process by assessing your parent’s financial needs: Are they struggling to pay their monthly premiums? Or do they need funds to pay for a major move, such as relocating to a nursing home or assisted living? Both circumstances are increasingly common among today’s senior population, and both serve as good examples of when life settlements can provide real value and security.

As you explore your parent’s options, it’s important to consider the needs of their beneficiaries, as well. If you and/or your siblings are listed as the beneficiaries on their policy, discuss your needs and priorities with them, too. In many cases, the adult children of a policyholder have become financially independent by the time their parents reach their 70s or 80s. If you or other beneficiaries no longer need the monetary relief a death benefit can provide, it may be time to for your parent to pursue a life settlement.

Insurance can be confusing at times, and life policies are no exception. Conducting a bit of online research is the best place to start, but if you have lingering questions about your parent’s policy, or if you don’t understand the more technical aspects of insurance or life settlements (tax implications, for example, can be particularly tricky), consult a life settlement adviser.

Applying for a free, no-obligation quote is simple, and it’s something you can easily do on your parent’s behalf. Get a quote today, and play an integral role in protecting your parent’s financial future.

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