Here’s a Simple Life Settlement Definition
A simple definition of a life settlement is the selling of a person’s coverage to someone in exchange for an upfront agreed upon amount. The coverage policyholder is provided with a payment that is greater than the plan’s cash value, yet still less than the plan’s benefit at maturity. After the insurance coverage is transferred, the investor is now the new beneficiary on the plan and will assume the obligation for ongoing repayments. The person selling their policy gets paid for the policy, and the person making the purchase receives the lump-sum payout when the insured party does pass.
In DE., life settlements are administered under the auspices of the Delaware Department of Insurance, and you’re best off if you visit the official website to be absolutely certain you are working with an approved firm. Q Capital is a licensed life settlement provider in Delaware.
Quick Take on How it Works
Once a policyholder takes the decision that they are looking to give up their asset, a life settlement may be a good option to quitting the standing life insurance policy and relinquishing it to the insurance company. In a large number of cases, the policy cash value is higher than the actual amount likely to be received if it were just lapsed. Making the decision to work with a sanctioned firm, the owner can take the policy to a bustling market where organized investors can bid on policies offered up for auction. At which point the sanctioned life settlement provider can watch over the complete sales process, from receiving offers from investors, to coordinating with the policy owner to complete the policy-sale closing process. And finally, all sales are closed with an escrow agent, as an additional level of assurance for the policy seller. Often, the sale of a policy can be completed within a month or two dating from the initial request.