Why surrender your insurance when you can gain the financial benefits of a life settlement in Illinois?

What is a life settlement?

A life settlement describes the selling of an already existing insurance coverage to a 3rd party for an one-time money repayment. The settlement is greater than the abandonment value, but less than the actual death benefit. After the sale, the buyer then becomes the plan’s beneficiary and assumes monthly payment of its premiums. By doing so, he or she gets the death benefit when the insured passes away.

How does it work?

When an insured individual can no longer manage their insurance coverage, they can offer it for a certain amount of cash to a buyer — normally an institutional financier. The cash settlement is primarily tax-free for most plan owners. The insured person essentially transfers possession of the policy to the financier. As we noted above, the insured obtains a cash money repayment in exchange for the policy — more than the abandonment worth, yet much less than the plan’s prescribed payment at maturity. By selling it, the guaranteed individual transfers every element of the policy to the new proprietor. This implies the financier that takes over the policy and ends up being responsible for premium repayments. Once the insured party passes, the new policy owner receives the payout.