Or, perhaps the proper term, viatical settlements.
Life insurance policies are assets, and do hold value. There are certain instances when when your life insurance policy has more value to you as cash, but it is vital that you are aware of the few times to consider this.
- An older couple, financially stable with grown children could use the cash value to give as an inheritance for their children and grandchildren.
- An older person could use the cash for personal care or for financial security and stability and to cover living expenses.
There are two categories that these settlements are classified into; viatical and life settlements. Viatical settlements are not subject to taxes, as the owner of the policy is not expected to live past two years. Life settlements are subject to taxes.
Bottom line: do your homework and don’t jump at the first offer that you receive. It is your money and your future.
