Tag: life settlement

How Seniors Spend Their Retirement Expenses [2019 Guide]

It’s something every adult understands—saving for retirement is a necessity. But beyond the nebulous idea of “putting money away for later,” how much do we really know about the actual costs incurred by American seniors? It’s a misconception that spending decreases after retirement; in fact, a study by the Employee Benefit Research Institute shows that 33 percent of all households containing retirees increase their expenses in the six years after they stop working. Whether due to mandatory needs like healthcare or elective spending like travel, seniors have more need than ever to have a handle on their finances and a thorough understanding of income options like life settlements.

Retirement Expenses 2019 GuideFollowing are some of the primary areas where research shows expenses are rising for seniors:

Healthcare

This is the category that hits many senior adults the hardest, because of the obvious surge in medical needs as people age. An article from CNN Money estimates that the average 65-year-old man will spend $189,687 on healthcare in retirement, while an average 65-year-old woman will spend $214,565. Because medical situations and their attendant costs are unpredictable, they are one of the key reasons seniors need to seek alternate sources of income and understand how to plan for healthcare expenses during retirement.

Housing

Even if healthcare costs can mount fast, housing expenses are the most consistent hits on a senior’s budget. A 2015 study from the Social Security Administration indicates that households with people over 65 spend about 35 percent of their funds on housing, more than twice the amount spent monthly on out-of-pocket healthcare, which came to 13 percent. When all of the costs associated with housing are considered—mortgage or rent payments, utilities, maintenance and furnishings—seniors spend an average of $14,034 annually, according to a breakdown in U.S. News and World Report.

Transportation and Travel

Even though some seniors see a drop in gas costs when they stop working, transportation is still the second-largest expenditure, according to the Social Security Administration study, comprising 15 percent of the average senior’s budget. Transportation costs, as well as money spent on hotels, food and other entertainment, tend to rise in the retirement years because of the extra time for travel in retirement years. To mitigate this expense, seniors can seek travel discounts just for those 65 and older, and they can also take advantage of the freedom to travel during off-peak times when working people are unavailable.

Long-Term Care

Americans are living longer and care options are becoming more expensive, a combination that leads to a consistent gap between needs and resources for today’s retirees. Even those who purchase long-term care insurance may find the benefit isn’t sufficient for their needs, and many seniors don’t put money away for the possibility and end up in a financial bind when they need long-term care. A 2017 study by Genworth Financial shows that long-term care, independent of medical bills, costs seniors anywhere from $18,000 a year (adult day care) to $97,000 a year (private room in a nursing home). And it’s a situation the majority of seniors will face; about 70 percent of 65-year-olds will incur some type of long-term care costs in their lifetime, at an average cost of $138,000 per person.

Food

Of course, people over 65 continue to incur the same basic expenses as every other age group, and food is no exception. Seniors can save by using coupons or store discounts, but groceries and dining out still make up one of the major budget categories for older Americans. For the cost-conscious senior, eating at home is by far the more economical option, although travel and other obligations can make the convenience of restaurants much more tempting. An example presented in a 2018 Motley Fool article speculated that if an average meal at a restaurant costs $50, the same food prepared at home would cost $12.50. Using those numbers, the article calculated that a senior who skipped two restaurant meals a month would save $900 a year.

Even though these five categories are typically the ones that cause the most headaches for seniors, other expenses can also be unexpectedly high during retirement—education costs for family members, insurance and entertainment, to name a few. Seniors can help to combat an expensive retirement scenario with a number of strategies, including part-time employment, using their resources as sources of income (such as renting out a room or driving for a ride sharing service), understanding tax deductions for seniors or cashing in an unwanted life insurance policy.

Seniors don’t have to cancel life insurance; instead, a life settlement can turn a burdensome policy into a valuable asset. Magna Life Settlements buys existing life insurance policies, and any senior seeking to budget for retirement expenses should become informed about the growing popularity of such settlements. To learn more, set up a call with a Magna representative today.

*Comments provided in this post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.

What is a Life Settlement? [2019 Guide]

In many circumstances, a life insurance policy is an important investment that can benefit those left behind when a loved one dies. Many financial advocates would recommend life insurance to a client, but those same advisors understand that the efficacy of life insurance often runs its course. What alternatives exist for older policy holders who are still paying premiums despite the fact that their needs have changed and they don’t really need the policy anymore? It is possible that those individuals can sell their life insurance policy for cash value through a life settlement, in which a third party buys an unwanted insurance policy in exchange for cash. Here are some facts about the life settlement option:

The History Behind The Life Settlement Industry

The origin of life settlements dates all the way back to a 1911 Supreme Court case called Grigsby v. Russell. In the 1980s sellling an unneeded life insurance policy for cash became a way for people with diminished health to obtain funds for medical and living expenses. In the years since, legislation and tax laws have created a more favorable climate for consumers looking for options when an insurance policy is no longer needed. Statutes passed in the last five years now mean that 90 percent of Americans are protected by comprehensive life settlement legislation.

What Are The Benefits Of Selling My Life Insurance Policy?

The retirement years are costlier than ever, both because of the rising price of health care and the uncertainty of government resources like social security. A life insurance policy is an asset that can outlive its usefulness; the original beneficiary might not need the proceeds anymore, or the premiums have become burdensome. Under these circumstances, it is worthwhile for a senior to explore an option that can free up cash in the sale of that unwanted policy. Besides the obvious cash windfall, a life settlement also eliminates the premium payments that have depleted even more of a retiree’s limited resources.

Do I Qualify?

Two key variables dictate whether an individual would benefit from a life settlement: the policy holder’s level of health impairment and the cost structure of the policy. The two factors are related, where a policy issued with a higher rating combined with a poor health prognosis can result in a promising settlement offer. For example, if a universal life policy was issued at preferred-plus and the policy holder becomes significantly more impaired than predicted, a life settlement would provide a payout higher than the stated cash surrender value. Some policies are not a good fit for a settlement, and the owner may be better off to either surrender their life insurance policy for cash value, borrow against the policy’s value, or negotiate another option with their carrier. To find out whether a life settlement might be a good fit for you, visit Magna Life Settlement’s simple calculator.

What Are The Steps To Sell My Life Insurance Policy?

Because a life settlement can provide a significant cash payout to help pay for retirement expenses, no one should miss that opportunity simply because they don’t understand the life settlement process. As the word gets out about the potential upside of life settlements, seniors who are likely to benefit from these transactions need guidance about how it works and how to start the process. Here are the basic steps of a life settlement:

1. Determine your eligibility. Using Magna’s calculator, first determine whether your medical status and the specifics of your policy make you a good fit for a settlement.

2. Submit an in-force illustration. With the help of a Magna case administrator, you will request an illustration from your life insurance carrier that spells out what the minimum premium costs would be if you kept the policy until it matures – typically at age 100 – and if the net policy account value at maturity was $1,000. This allows us at Magna to determine how much your policy may be worth.

3. Submit additional healthcare data. At this point, you will fill out a HIPAA form protecting your privacy and submit your health data. This also helps us to determine how much your policy may be worth.

5. Wait for Magna review and informal offer. Then, your Magna representative will calculate the value of your policy and decide whether or not to make you an informal offer, pending the next steps of information gathering.

6. Magna obtains medical records and life expectancy report. These reports verify your policy value so that Magna can calculate an offer that pays out the maximum amount for your policy.

7. If your policy qualifies, Magna extends a formal offer. If you accept the offer, you will receive cash in exchange for the sale of your policy after the sale is complete. This closing process takes some time. Similar to buying a house, a life settlement involves signing contracts.

8. Magna takes over the policy. After the settlement transaction closes, Magna is responsible for paying all future premiums and receives the death benefit once the policy matures.

If you are interested in receiving a personalized life settlement estimate or have questions about the process, contact a Magna representative today.

*Comments provided in this post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.

Sell a Life Insurance Policy For Cash?

sell life insurance policy for cash

With the promise of the insurer passing over a pre-determined amount of cash to your beneficiaries upon your demise, you are expected to pay monthly or quarterly premiums to the insurer. But what happens when you are unable to pay or feel like you don’t want to continue with the life insurance policy? Can you sell life insurance policy to a third party and how much can you expect as the settlement? Most importantly, when is the best time to sell the policy to a third party?

So the question is can you sell your Life Insurance Policy?

It is within your rights to sell a life insurance policy that you no longer need to a third party under the life settlement clause. Ideally, the sale involves transferring your claim over the expected payout to a third party investor in exchange for cash. In effect, the investor offers immediate cash payment (also known as a buyout) and continues paying the premiums up to the time of your passing when they can then claim the full settlement from the insurer. Life Settlement companies like Magna, help you sell your life insurance policy form the comfort of your own home, or over the phone.

Sell Life Insurance Policy How much cash can you expect from the sale?

How much you receive from the life insurance sale depends on a host of factors set out by the third party investor. In most cases, the investor considers such factors as the value of the policy, your current health condition, and age.

The average settlement ranges from 20 to 25 percent of the value of your policy. The subject is nonetheless open to negotiations, and this has seen the settlement value shoot to as high as 50 percent of the policy size. You should, however, note that not every subscribed life insurance qualifies for settlement.

Eligibility for life insurance policy sale

Almost every third-party life insurance investor has eligibility criteria that they use to screen individuals seeking to sell their life insurance. Nonetheless, some of the standard procedures followed by most investors include the fact that you must be above 70 years of age and have a policy value of more than $50 thousand. Most companies also prefer universal, whole, and convertible term life policies.

The regulations are, however, not set in stone. Plus, the stiff competition has forced some companies to accept policies for individuals aged 65 years. Most investors will also overlook the age limit, especially if the insured is terminally ill with a life expectancy of less than two years.

When does settling a life insurance policy make sense?

Non-payments of premiums

Insurance companies may decline to honor a life insurance claim if you stopped or have been inconsistent with paying premiums. Therefore, in the event financial constraints make it impossible to honor the regular premiums, remember that you have the option to sell the policy in a life settlement rather than allowing the insurance company keep the money.

Medical expenses and emergencies

When pressed by large medical expenses that need to be paid up front, you can always count on the proceeds of the settlement. Though saddening, health complications may in actual sense raise the settlement value of the policy where the investors project a lower life expectancy.

How to maximize the settlement amounts that get to your bank

Life policy settlement is taxable under income and capital gains. With the government taxing the settlement, the last thing you need is a broker or insurance agent seeking to dig further into the little left. Maximize the amount of the settlement that gets to your bank account by working with inexpensive agencies, and, if possible, reach out to the investor directly.

Contact Magna Life Settlements to get a free estimate on how much cash you can get from your life insurance policy!

Questions to Ask Yourself Before Lapsing Your Policy

Questions to Ask Yourself Before Lapsing Your Policy - Magna Life Settlements

For a host of reasons, insurance policies that seemed like a good idea during an individual’s middle-aged years can become a burden as that person ages. There are undoubtedly good reasons for a policyholder to shed such an unwanted policy, but what many people don’t understand is that there are other options to lapsing a policy.

If premiums have become unwieldy, or the original beneficiary of the policy no longer needs the funds because of altered circumstances, the first reaction is often to let the policy lapse. What does lapsation entail, and why should seniors consider alternatives that could result in a better financial result? Here are three key questions policyholders who are considering doing away with their life insurance policies should ask themselves:

1. Do You Need The Policy?

The first step, for an individual considering getting rid of an insurance policy, is to consider the cost and future benefit and make a thorough determination of whether that policy is still necessary. Significant changes in income or family structure, in particular, may diminish the efficacy of a policy, especially if the intended beneficiary no longer needs the payout.

2. How Are The Premiums Affecting You?

For seniors, particularly those on fixed incomes with rising health care costs, continuing to budget for insurance premiums might not be the best use of limited resources. Additionally, depending on the structure of the policy premiums can get more expensive as the years go on. Seniors who are discouraged by this burden are often tempted to just stop paying and let the policy lapse rather than considering a more profitable alternative.

3. What Are My Other Options?

Even if policy holders are convinced that they would be better off without a particular insurance policy, they could explore the option to sell their policy before letting it lapse. Lapsation removes the premium burden, but it doesn’t compensate the individual for the money paid out in premiums over the years. Rather than let a policy lapse, more and more seniors are investigating life settlements, which allow for the sale of a policy for cash. Not everyone qualifies for a life settlement, but for those who do qualify, it provides a way of unloading a policy that has become a liability. Find out if you can turn your life insurance policy into asset today by scheduling a call with a Magna life settlement specialist or trying our simple life settlement calculator.

*Comments provided in this blog post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.

How To Avoid Feeling Stuck In Retirement

The cost of retirement is higher than ever, creating a pressing need for Americans to find ways to prepare financially for retirement as wisely as possible and use their retirement funds well after they stop working. Everyone knows they should prepare for their retirement years so that they can enjoy that season in life rather than feeling stuck, but some fear that they won’t do enough.

Your Guide to Navigating Retirement with Ease

According to the Retirement Confidence Survey conducted by the Employee Benefit Research Institute, 36 percent of current American workers feel “not too or not at all confident” in their ability to retire comfortably. Additionally, 46 percent reported a lack of confidence in having enough resources to pay medical expenses after they retire, and 58 percent doubt they will have enough money for long-term care.

Guide to Navigating Retirement - Magna Life SettlementsThe key to a fulfilling retirement comes when working people take the long view, making decisions in their earlier years that will lead to financial stability and opportunity down the road. By managing debt and seeking sound financial guidance, Americans can plan ahead to create the kind of retirement they have hoped for.

Debt Management

It is never too early to eliminate debt with an eye toward retirement. The seniors who are getting the most of their retirement today–traveling, investing in their interests and their legacy and keeping a financial margin for health care and other unexpected expenses–are the ones who took care of credit card, home, car and other debt while they were working to maximize their options as retirees.

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Seeking Sound Financial Advice

Too often, individuals start meeting with a financial advisor when retirement is drawing near, but a wiser move is to develop a relationship with a financial advocate early in your working years so that he or she can help map out your path to a fruitful retirement. When financial advisors are well acquainted with their clients’ financial history, family situation and goals, they will be equipped to customize advice and strategies to optimize their clients’ retirement.

Short-term measures to boost income, like life settlements, are one way to help keep seniors from feeling stuck and provide financial freedom in their later years. Connect with your financial advocate to see if this is the right option for you.

When Families Change, Life Insurance Needs Can Change Too

When Families Change, Life Insurance Needs Can Change TooWhen someone takes out a life insurance policy in their ‘30s, ‘40s or ‘50s, that purchase is predicated on assumptions about the future of the policyholder’s family. But unexpected changes to the family structure can occur over the years, and for seniors those changes might lead to the consideration of a life settlement.

Insurance For Your Family: What You Must Know

The most common family change, with obvious insurance ramifications, is divorce. Often a person buys life insurance, names their spouse as a beneficiary and later gets divorced, voiding the need for a policy that will support the surviving spouse. If the policyholder is over 65 and paying into premiums unnecessarily, a life settlement can turn that situation around and provide a windfall rather than burdensome expenses.

In the same way, a senior who undergoes a divorce and then gets remarried later in life may want to schedule a life insurance check with their broker to guarantee that the coverage serves the needs of the policy owner and his or her new spouse. A new policy with a new beneficiary might not be practical or affordable if the remarriage happens late in life, but that new family could be eligible for a cash windfall through a life settlement that they can enjoy in their retirement years.

Insurance Policy Review

If an insurance policy is structured to benefit children or grandchildren, the addition of family members through birth or adoption could prompt an insurance re-evaluation. Some policyholders, particularly seniors, opt to sell their policies and use the proceeds for college funds or other legacy investments rather than an insurance policy that will pay out after their death. Seniors who create educational funds for their grandchildren can have the benefit of watching those young people take advantage of higher education and make steps toward building their futures.

Life Events Lead to New Insurance Needs

Change is inevitable in life, and changes to families—whether welcome or unwelcome—can create new investment and insurance needs. Seniors with a thorough understanding of their financial options will provide the richest opportunities for themselves and their loved ones, and those facts are available from trusted financial advocates or specialists like the ones at Magna Life Settlements. If you have seen changes in your family and believe that a life settlement could be a better use of your resources than an unneeded life insurance policy, set up a call with a Magna advisor or try our simple life settlement calculator today.

 

Understanding Long-Term Care Insurance Options

Whether or not they prepared financially for it during their working years, the need for long-term care is a reality that most seniors must eventually face. Every situation is different, but most people as they age will either need long-term care themselves or find that their spouse needs it. Without proper planning, that can be a sobering truth indeed.

Long-Term Care Insurance Options for You

A 2017 study by Genworth Financial shows that long-term care, independent of medical bills, costs seniors anywhere from $18,000 a year (adult day care) to $97,000 a year (private room in a nursing home). And it’s a scenario the majority of seniors will face; about 70 percent of 65-year-olds will incur some type of long-term care costs in their lifetime, at an average cost of $138,000 per person.

Understanding Long-Term Care Insurance OptionsFor those who start thinking about long-term care resources in their ‘50s, purchasing a long-term care insurance policy could be a prudent option. But the premiums generally cost between $2,500 and $5,000 a year, and a senior will need to keep paying for the insurance after retirement. As with all insurance, it’s a gamble to theorize whether the expenditures in your younger years will be worthwhile, since no one knows how healthy their retirement years will be.

Other Options for Long-Term Care

Another option, and a relatively new product, is a life insurance policy with a long-term care rider. These policies are structured to allow for life insurance payouts when the policyholder is younger and has beneficiaries to protect, which will turn into long-term care coverage in that person’s later years. The rider accumulates the most value when entered into in a person’s ‘40s or ‘50s.

When a senior faces a dire need for long-term care, other options do exist to help fund that expense even if that individual didn’t plan for it in his earlier years. Some seniors liquidate assets like houses and cars, which they no longer need if they are moving into a care facility, to pay the bills. Others, if their assets have become depleted, can use Medicaid to help pay for continued care. But those who don’t wish to drain their resources or find themselves restricted to Medicaid-accepting facilities might find themselves in a bind with a pressing need for an alternative income source.

Life Settlements for Long Term Care Needs

Enter life settlements, in which seniors sell unwanted life insurance policies and receive a cash windfall that can be used for long-term care needs. Not every individual qualifies for a settlement, but declining health can often increase the odds that a settlement will be favorable. To learn whether you or your loved one could pursue a life settlement, try Magna’s simple life settlement calculator, or schedule a call with one of our specialists today.

 

The Top 8 Cities for Retirement in the U.S. in 2019

retire united states

Once you reach retirement age, it’s important that you are able to manage your finances properly. Stretching the dollars you’ve saved may mean you’ll want an inexpensive place to live out your retirement. If you’re looking for U.S. cities with a low cost-of-living, check out our list below.

Where to retire in the United States in 2019?

8. Cleveland, OH

Cleveland’s annual living expenditures total around $36,000. This figure factors in important items such as your housing, healthcare and transportation costs. Frugal spenders who have managed to save a modest amount each year throughout their working lives will have no trouble managing their expenses in this city.

7. Augusta, GA

You can expect to spend $35,781 on an annual basis should you retire in Augusta. In addition to low costs for your basic needs such as food, housing, medical and transportation expenses, there are other reasons to choose this city in Georgia. Relatively warm summer temperatures are a major draw and many current residents report a high happiness index.

6. Brownsville, TX

There are several cities in the state of Texas that make excellent choices for retirement living. Brownsville is one such city, boasting a low cost of living of only $35,461 each year. Because it’s Texas, you’ll also enjoy warm or moderate temperatures all year round. If you want to experience other cultures, you’ll find a large Spanish-speaking community in Brownsville that is eager to welcome newcomers.

5. Toledo, OH

We’re back to Ohio, where you’ll only have to spend about $35,095 annually to enjoy a relaxing retirement lifestyle in Toledo. Groceries for an entire year will only cost you $3,375 and even the highest estimated expense – transportation – comes in at an annual total of $6,814. Current residents report high happiness across various age groups and enjoy access to many of the city’s amenities.

4. Memphis, TN

Memphis offers you warm temperatures and friendly greetings for just $33,859 in annual costs. The city combines a laid-back atmosphere that is perfect for easy-going retirees along with the amenities and upscale venues one might expect from a major metropolitan area. If you’re looking for a slower pace as you enter retirement, but don’t want to sacrifice the modern conveniences of a major urban area, you should definitely consider Memphis as your retirement destination.

3. Jackson, MS

A move to Jackson might be perfect for you if you enjoy distinctive culture coupled with a low cost of living. Annually, you’ll only need to spend $33,676 to enjoy a pleasant lifestyle in Jackson. This, combined with the area’s Southern charm and culture make it an appealing option. Jackson is also currently undergoing revitalization, so you’ll be able to see the old merge with the new during this transformation.

2. Detroit, MI

Detroit is another place where you’ll see history and culture come together with modern innovation. Retiring to this city will only cost you $33,356 each year, which includes everything from housing to transportation. The metro area borders Canada, so you can experience the unique influence of the early French settlers. While parts of the city are sparse, the city is still a modern metropolis with plenty to offer to keep you entertained during retirement.

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1. Birmingham, AL

Birmingham tops our list because we’ve found that it’s one of the least expensive cities to live in across all categories. Housing costs are a little higher on average than some other cities we’ve cited here, but Birmingham makes up for that with much lower costs in most other areas. Average healthcare costs for this city are comparatively low, as are the transportation costs. Birmingham capitalizes on this by offering modern, urban areas and attractions at more affordable prices than some bigger cities. Even as you stretch your dollars, you’ll find plenty of opportunities for entertainment or new experiences here.

This list showcases our top eight picks for affordable retirement choices in the U.S. While we’ve given you the best overall annual average costs, keep in mind that these can vary somewhat depending on things like your specific transportation needs (public or private) and your grocery budget. Your personal finance plan may be able to reduce these costs even more.

Insurance Overload: When Seniors Find Themselves with Too Much Insurance

insurance overload - too much insurance seniors - magna life settlements

It’s an idea reinforced from the very advent of adulthood: it’s better to have too much insurance than too little. But in the case of retirees, over-insurance is a very real possibility, and it’s a problem that can keep seniors from having sufficient resources for the costs of their golden years, expenses like medical bills, long-term care and travel.

What does it mean to have too much life insurance?

Sometimes middle-aged adults, unsure of their future needs and swayed by persuasive sales pitches, buy large policies, or several different policies, because of their fear of leaving their families with no means of support. Sometimes the amount of coverage makes sense at the time of purchase, but as the years go by circumstances change and that level of insurance is no longer needed.

Maybe your original beneficiaries no longer need the financial support they once needed in your younger years, or your family dynamics have changed. Many seniors find that they are paying prohibitive premiums, giving money they need for daily expenses to an insurance policy that isn’t actually serving them anymore. And when they are over-insured, they may come to the realization that while they still need some life insurance, they don’t need as much as they have been carrying. Even if beneficiaries might still need a payout when the policyholder dies, an overly large policy might give them more than they actually need.

Above all, seniors need to make sure that they haven’t invested in life insurance to the detriment of their own livelihoods. As one insurance blogger stated, “We all need to make provisions for our loved ones in the event of our death, but that should never be at the expense of providing for our lives. Statistically, you’re much more likely to live out your full life than to die prematurely. You will also need to provide for that!”

If you suspect you might be over-insured, schedule an appointment with a trusted financial advisor to evaluate all of your insurance holdings and their efficacy for your situation. If you have too much insurance, the next step is to investigate the possibility of a life settlement. For those who qualify, a settlement can turn a liability—excessive insurance—into a windfall of available cash for immediate retirement needs. Magna’s life settlement advisors are available to answer questions about life settlement criteria and the steps in the process.

The Impact of Rising COI on the Life Settlement Market

How to Calculate COI - What is COI - Magna Life SettlementsThere was a time when the COI (cost of insurance) charge on a universal life insurance policy was virtually assured to stay stable. Those who purchased policies looked at historical trends and concluded that their premiums weren’t likely to go up because of an increase in COI, defined as the amount a policyholder pays to cover the value of the death benefit.

According to the Department of Financial Services a COI is the premium rate for a life insurance policy is based on two underlying concepts: mortality and interest. A third variable is the expense factor which is the amount the company adds to the cost of the policy to cover operating costs of selling insurance, investing the premiums, and paying claims.

But the landscape has changed, and universal policy owners find themselves in a season of uncertainty about COI and, consequently, the potential roller coaster trend in their premiums. In a recent presentation at a Life Insurance Settlement Association conference, QuantRes consultant Matthew Sheridan spoke about the uptick in COI and presented a model predicting which types of policies are most likely to be hit by the increases in the coming years.

According to Sheridan, his predictive model suggests that older, underpriced policies are the most likely to be hit with COI increases. It’s a trend with several different repercussions for those who sell or buy insurance policies on the life settlement market, including:

More interest in life settlements from policyholders

When COIs rise and premiums go up accordingly, seniors who are already living on a limited budget are often more likely to look into a settlement as a way to unload those premiums and bring in extra income. A life settlement isn’t the right answer for everyone, but anyone with a burdensome policy should calculate their potential eligibility for a settlement.

A movement away from universal policies

Consumers and investors alike are concerned about the stability of universal life policies due to the unpredictability of the COI increase trend. This upturn has led to more careful examination of different types of policies in search of more stable cost structures. If universal policies become less popular, the providers might respond to market forces and make moves to stabilize COI.

Our Magna life settlement experts stand ready to answer policy owners’ questions about their rising premiums and the best options for turning a burdensome policy into a needed financial windfall. To find out if the sale of your policy might be right for you, schedule a call with a Magna specialist today.





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