Who's cashing in your chips?
The New York Daily News, July 30th, 2007
Someone out there wants to place a bet on when you're going to die -
and they're willing to hand you a chunk of cash now, while you're still
alive.
This fast-growing business allows seniors to raise quick cash by selling their life insurance policies.
Years ago, seniors who didn't need life insurance anymore or could
no longer afford the premiums didn't have many options. They could
either let the policy lapse or collect the cash value, often a meager
sum.
Now, a growing number of people older than 65 are entering into
deals called life settlements where they sell off their life insurance
to a third party for more than its cash value, but less than the death
benefit.
"It's an asset that seniors never realized they had," said Doug
Head, executive director of the Life Insurance Settlement Association.
There is a creepy catch: The sooner you die, the better it is for
whomever bought your policy. That's because the new holder can stop
paying premiums and collect the death benefit.
Read more of this article.