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Could a Life Insurance Policy Help Pay for Care Needs Now?

Real-Life Examples of Utilizing this Untapped Asset

As Aging Life Care Professionals® customize care plans and resources for their clients, they are careful to evaluate and manage the client’s financial resources necessary to ensure quality care and an optimal life.

An often-overlooked financial resource is life insurance. Did you know that 500,000 seniors a year will walk away from their life insurance policies?  This happens because they no longer want the policy, need the policy, or can afford the policy.  The reason a policy was purchased 10, 20, or even 30 years ago is no longer a concern.  The house is paid off, perhaps a spouse has passed away, the kids are grown and have their own lives, etc.  Or maybe the policy premiums have become unaffordable.  What many don’t realize is there is another option that can have a dramatic impact on the ability of clients to pay for their care needs.

A life insurance settlement is that option. It is the ability for a client to sell an unwanted/unneeded life insurance policy for cash.  Yes, that’s right, a life insurance policy is an asset that can be sold – just like a car or a house.  The investor groups who purchase these policies become the new owner, pay the premiums, and become the beneficiary.  The client receives cash today, and the buyer receives an investment with a future return.  The amount a policy could we worth is very specific to each client, but policies can be worth tens of thousands or hundreds of thousands of dollars…all from an asset a client was going to walk away from.  All different types of policies can be sold, including term policies.

Here are some real-life stories  whose lives were changed through a life insurance settlement:

  • A 66-year-old woman with Multiple Sclerosis (MS) had a $150,000 term life insurance policy.  Her beneficiary was her ex-husband.   There were no children and no one she wanted to leave the money to.  This policy was no longer needed or wanted.  She did not know a life insurance policy was an asset that could be sold.  Since she didn’t need it anymore, she decided selling the policy made sense, in order to give her money for the care needs she knew she would need in the future.   We marketed the policy and she sold it for $25,000, giving her the financial cushion she wanted.
  • A 78-year-old gentleman with cancer had a $250,000 term policy.  He purchased the policy for his wife so she would be protected and could pay off the house if something should happen to him.  The house had long been paid off, and his wife had passed away four years ago.  His daughters were the beneficiaries.  They had successful careers and their families did not need the money.  He decided that he wanted to sell the policy to make his life more comfortable while he was still alive.  The opening offer on his policy was $15,000.  By the time we were done, he sold it for $128,500.  That will go a long way to helping him stay comfortable for the rest of his life.
  • A 58-year-old gentleman with significant heart issues had a $1.6 million universal life policy.  He was a successful businessman and his family was well cared for.  He had a dream of living on a ranch for the rest of his life.   So, he sold his business, sold his house, and sold his policy for $350,000 (the opening offer was $125,000).  Now, he has the resources to live the rest of his life the way he wants.
  • A healthy 88-year-old gentleman needed to find money to continue to pay for his wife’s home care needs.  He had several life insurance policies.  He sold his $114,000 policy for $26,000, giving him the resources needed to continue the care for his wife.
  • A 66-year-old gentleman with liver issues held a term life insurance policy that was reaching the end of its term.  He purchased it for his wife to pay off the house if something happened to him.  The house was now paid off and he was not going to continue the policy.  He sold the policy for $75,000.  This was “found money” for him, as he was going to walk away from the policy with nothing – a game-changer to help make his life more comfortable.

These are just some examples of clients who were able to repurpose an asset – one they didn’t know they had – into cash to use to take care of themselves and their families.   We are life insurance settlement brokers and are here to support Aging Life Care Managers and their clients.  As brokers, we have access to many investor groups.  Our role and fiduciary duty is to represent our clients to obtain the highest amount for their policy as possible.

If you know anyone who is thinking of lapsing, surrendering, or walking away from their policy, please contact us first so they can find out if a life insurance settlement may work for them.  There is no up-front cost to find out how much a buyer may be willing to pay.  Contact us – we’re here to help.

About the Author: For more than 30 years, Lisa Rehburg has been working with insurance brokers, financial advisors and clients in the health and life insurance industries. Ms. Rehburg is energized by helping financial professionals, non-profit organizations, health care professionals and their clients benefit from unwanted or unneeded life insurance policies. Rehburg Life Insurance Settlements is  a proud ALCA Corporate Partner.  Ms. Rehburg can be reached at (714) 349-7981 or lrehburg@aol.com.

Disclaimer: This blog is for informational purposes only and does not constitute, nor is it intended to be a substitute for, professional advice, diagnosis, or treatment. Information on this blog does not necessarily reflect official positions of the Aging Life Care Association® and is provided “as is” without warranty. Always consult with a qualified professional with any particular questions you may have regarding your or a family member’s needs.

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