A life settlement involves selling your life insurance policy to a third party for a lump sum, often higher than the policy’s cash surrender value but less than the death benefit:
- Who Can Benefit: Life settlements are generally for older individuals who no longer need the coverage or find the premiums unaffordable.
- Financial Flexibility: Selling a policy provides immediate cash, which can be used for medical expenses, retirement, or other needs.
- Tax Implications: Life settlements are taxable, so it’s essential to understand how this impacts overall finances before proceeding.
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