The Deal On Life Settlements
CBS News, February 26th, 2007
Life insurance was always intended as a nest egg for providing for your loved
ones after your death. But so-called "life settlements" are growing in
popularity. What are they and are they a good deal for you? Ray Hennessey,
editor of Smartmoney.com, explains what exactly they are.
Life
Settlements are when a company buys your life insurance policy for less than the
full amount of the policy. This is a way of getting cash in your hands now. But
there are things to consider before you do this.
Shop around for better
offers. "Chances are someone is going to approach you and say would you like to
sell your life insurance policy," Hennessey says. "Just because they are the
first person who calls, doesn't mean you have to take that offer." Also feel
free to negotiate for a higher value.
Also, beware of high commissions.
"Just like any brokerage transaction, they take a very steep fee out of this,"
Hennessey warns. "So not only do you not get all the money, but these brokers
are making tons of money on this."
Read more of this Article.