A LIFE INSURANCE POLICY CAN HELP PAY FOR CARE

A life insurance policy is an asset that you own. As with any asset, it can be sold. Yet few people know this option exists. If you are trying to find ways to pay for care needs, a life insurance policy can be another solution. Policies can be sold for a lump-sum of money through what is called a life insurance settlement. Life insurance settlements are legal (since 1911) and highly regulated by the Departments of Insurance across the country, offering a safe alternative for clients.

Investors purchase life insurance policies as a diversification tool for their portfolios. The amount of money paid to clients depends upon the type of policy, the size of the policy, the premiums to carry it and the life expectancy of the client. At the end of the sale, the buyer is going to take over the policy, pay the premium and make themselves the beneficiary. The shorter the life expectancy of a client, the more money a buyer is willing to pay for the policy.

Policies can be worth tens of thousands or hundreds of thousands of dollars. The money clients receive from selling their policy can be used for anything. And any type of policy has the opportunity to be sold, including term policies.

A client recently sold their $1,000,000 term life insurance policy to pay for future care needs. The client does not need care now, but knows she will in the future. She sold the policy for $480,000, giving her the financial freedom she needed to quit her job and focus on her health.

To market a policy, a client’s medical records need to be obtained and premium projections from the insurance company. Then buyers need time to evaluate the policy, premiums, and medical records. From the time an initial application to market the policy is received, to the time buyers respond, can be 60 – 90 days. Clients are not obligated to accept any offers from buyers, so it is a free, no-obligation appraisal of their policy. Once a client accepts an offer, it can take another 4 – 6 weeks to complete the sale process, so this is a longer term solution and not a short term source of funding.

As mentioned above, the market and process are highly regulated to protect clients. Each buyer must be approved to purchase policies by the Department of Insurance in the state in which clients live. HIPAA compliance, strong financials, and policy trackability must be demonstrated to protect clients.

Selling a life insurance policy may not be perfect for everyone, and a client should consult with their financial advisor before looking at a life insurance settlement 

because other options may be available. But in the right circumstances, a life insurance settlement can help clients obtain the funding they need to be comfortable for the rest of their lives.

Lisa Rehburg is President of Rehburg Life Settlements, a life settlement broker serving clients in all 50 states. Her fiduciary duty is to clients to market their policies to obtain the highest amount of money for them.

Lisa is a valued member of PRO’s Resource Directory. You can learn more about Lisa and her company Rehburg Life Settlements at parkinsonsresource.org/Rehburg .