Tag: retirement

Accelerated Death Benefit Versus Viatical Settlement: Which Is Best For You?

accelerated death benefitHearing the news that a loved one is facing a terminal diagnosis is stressful for everyone in the family, and unfortunately financial concerns can also come into play along with the prospect of impending loss. What are the options for a terminally ill senior facing mounting medical or care expenses? Can a life insurance policy be leveraged to help meet that need?

There are two different options allow a policyholder to get cash out of a life insurance policy that might not be needed anymore. Both viatical settlements and accelerated death benefits could offer financial relief to families facing a difficult diagnosis, but the two agreements are different in several key ways.

Accelerated Death Benefit

An accelerated death benefit (ADB) is a provision attached to some life insurance policies that allows consumers to borrow against the value of the death benefit in the event of a terminal illness. The ADB, which comes in the form of a cash advance, is generally tax-free if the expected life expectancy of the policyholder is two years or less.

Generally an ADB is laid out as one of the features of a policy when it is originally issued, but according to some experts most insurance companies will consider providing the benefit if the policyholder meets the requirements, even if it wasn’t originally part of the policy. According to a January 2018 article on Investopedia, individuals may be eligible for an ADB if they meet one of the following criteria:

  • Diagnosis of a terminal illness with life expectancy of two years or less
  • Diagnosis of any serious illness that will reduce expected life span
  • Need for an organ transplant because of serious illness
  • Enrollment in hospice care

In most cases, a policyholder who accelerates his or her death benefit to help defray expenses only borrows against part of the policy, leaving a reduced death benefit that is still available for the original beneficiary. For example, if an individual with a $1 million life insurance policy needs funds for health care, he could borrow against half of that policy, receiving an offer of $265,000 cash against $500,000 of life insurance. That would leave $500,000 to go to his beneficiary upon his death.

Viatical Settlement

 A viatical settlement is a type of life settlement, but generally viatical settlements are reserved for those who have been diagnosed with a chronic or terminal illness. A terminally ill person is defined, for tax purposes, as one whose physical condition will be reasonably expected to end in death within twenty-four months of certification. A chronically ill individual is one who has been certified by a healthcare professional with either a substantial physical or cognitive impairment.

In a viatical settlement, a life insurance policy is sold to a third party for a lump sum, and the buyer assumes the premiums and receives the death benefit when the seller dies. The proceeds from a viatical settlement are generally exempt from federal taxation, because the Internal Revenue Service considers the payout to terminally ill individuals to be taxed in the same way as a benefit upon the death of the insured. In the case of someone who is chronically ill, the settlement proceeds can be tax exempt if the funds are used to cover certain health care expenses.

How to Determine Which is Best?

If a terminal illness has caused a financial strain, a life insurance policy can become an asset while the policyholder is still alive, but the individual will need to research the details of his or her policy to determine which type of transaction is better and more profitable for the situation. Sorting out the best path to help provide financial help to a family suffering a health crisis can be stressful, and a trusted advisor could help make sense of the situation and lay out the potential advantages of either path.

The first step, for any individual or their advisor considering the two options, is to determine whether the original policy included an ADB and whether the provider is willing to negotiate one if it isn’t laid out in the original terms. On the other hand, a viatical settlement usually requires documentation of a terminal diagnosis, so if such evidence is not available an accelerated death benefit might be the right choice.

The experts at Magna Life Settlements stand ready to advise anyone who thinks they might be eligible for a viatical settlement and answer any questions about the process involved in the sale. Set up a call with Magna today to ensure the best possible advice for your family through the illness of your loved one.

*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.

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.

Following 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.

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.

Magna Life Settlement Calculator

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.

 

Best Blogs to Inform and Enrich Older Americans

Top Blogs for Seniors

Certainly, there are some in the over-65 demographic who still get their news from traditional newspapers and television newscasts, but the newer media can offer a breadth of perspective and information beyond what one can find through old-school means. Because blogs are accessible to anyone and space on the Internet is unlimited, seniors might be overwhelmed when searching for blogs that are worth their time.

Here are five websites with blogs that provide informative, relevant and entertaining content for seniors:

 

The New Old Age

Any blog published by the New York Times can be trusted for accurate and quality information, and this column by Times writer Paula Span covers everything from changes in Medicare and Social Security to specific medical issues for an aging population to current events like the potential concerns with gun ownership by seniors.

My Itchy Travel Feet

This site, subtitled, “The Baby Boomer’s Guide To Travel,” features detailed articles about domestic and international travel destinations, customized for seniors. For the past decade, seasoned travelers Donna and Alan Hull have chronicled their own adventures and also reported on topics like necessary travel gear for retirees, options for group tours or other organized excursions and the latest online travel deals.

Minding Our Elders

Aimed at caregivers and the seniors they care for, this site explores the challenges and joys of elder care with insight and heart. Founder Carol Bradley Bursack examines everything from caregiver guilt and isolation to ideas for helping seniors preserve their independence and dignity. Recent posts include, “Valentine’s Day: Celebrating When A Loved One Has Dementia” and “Some Risk Is Often the Price of Living, Even for Older Adults.”

Squared Away

Administered by Boston College’s Center for Retirement Research, this blog features articles on the most current financial research that can impact seniors, as well as extensive analysis on everything from retirement trends to new financial products for seniors. With a clean look and a foundation in trusted, academic sources, this blog will help retirees answer a range of personal finance questions.

ElderChicks

A space especially for senior women, this blog provides a space for stories about women living out their retirement years in unique and bold ways, recollections from outside contributors and women-specific insight into current events that impact seniors. The site’s forum is a platform for women to support and inform each other, and the “ElderExperts” section features articles from experts on a range of topics.

These links are provided for your information and convenience only and are not an endorsement by Magna Life Settlements of the content of such linked websites or third parties. Magna Life Settlements has no control over the contents of any linked website and is not responsible for these websites or their content or availability. Magna Life Settlements makes no warranties or representations, express or implied about such linked websites, the third parties they are owned and operated by, the information contained on them or the suitability or quality of any of their products or services.

How To Select A Financial Advocate Who Understands Retirement Planning

Life Settlement Policy - Magna Life SettlementsLike a long-time doctor or a trusted hairdresser, a good financial advisor is a professional who can come to seem more like family. And since one of the most important roles of a financial advocate is to help a client plan for a stable retirement, how can you select an advisor who is genuinely caring, has extensive financial knowledge and who clearly understands your ideal retirement?

It’s not a decision that should be entered into lightly. Ideally, you will form a relationship with a financial expert who can help you navigate any potential pitfalls and difficult decisions that will arise on the road to retirement. Here are the key considerations that should guide you as you look for a financial advisor:

Experience

You will want an advocate with the education, background and experience to help you through any financial landscape. c You want an advisor who is up to speed on the latest offerings and pursues regular training and education to learn about new products.

Pay Structure

Financial planners typically earn their money in one of two ways—by commission or by charging flat or hourly rates for their services. Make sure you understand the charges before you hire an advisor and feel comfortable that if your advisor works on commission he won’t try to steer you to more profitable products that might not be right for you.

Personal Connection

It may seem like an intangible factor in a world of numbers, but because a relationship with a financial planner can last decades you may consider evaluating whether an advisor is trustworthy, honest and dependable. Interview several different candidates and see how you connect with each one. If you still need guidance, talk to friends and family about their own experiences with professionals in the field.

One emerging financial opportunity that an advisor might bring up to a client is a life settlement, which allows a senior to sell an unwanted life insurance policy for a cash payout. An informed financial advisor can help you understand the qualifications and potential benefits of a settlement. For a simple calculator to ascertain whether you might qualify, visit Magna Life Settlements today.

The Insufficiency of Social Security to Fund Retirement

funding retirement - magna life settlements

With a checkered history and the very real fear that funds could be depleted before many current workers can benefit from them, Social Security may no longer be the safety net it was envisioned to be when it was established nearly 85 years ago. Today’s seniors, as well as younger Americans planning for retirement, must pursue other financial avenues to ensure comfort during their later years.

The timeline of Social Security, from the time it was created to provide benefits for workers who retire at age 65 or older, includes several expansion measures and other adjustments to deal with the nation’s financial downturns. The last major legislation designed to protect the fund, passed in 1983, called for a gradual increase of eligible retirement age from 65 to 67 and boosted the Social Security tax with the hopes of generating a surplus to help take care of Baby Boomers when they reached retirement age.

Magna Life Settlement CalculatorThat day has been reached, and the surplus is disappearing fast. Following are three of the chief causes of Social Security’s decline:

An Imbalance Between Workers and Beneficiaries

The expected surge in retirees as Baby Boomers have left the workforce has been met with a corresponding decline in the number of workers, so that the contributions to the fund are not nearly enough to cover those who need it today. The worker-to-beneficiary ratio is expected to fall from 2.8-to-1 to as low as 2.1-to-1 by the year 2035. (source: The Motley Fool)

An Upward Trend in Life Expectancy

Studies from the Center for Disease Control predict that people born today can expect to live to an average age of 78, up from 70 just 50 years ago. Notably, however, life expectancy declined slightly between 2014 and 2017 not because of increased mortality among seniors, but due to the alarming rise in suicide and drug overdose fatalities. The broad trend—that Americans are living longer—will lead to an ongoing drain on the Social Security nest egg.

Record Low Yields for Special Issue Bonds

These bonds, traditionally the source of interest income for the Old-Age, Survivors, and Disability Insurance Trust (OASDI) that funds Social Security, are generating less income than ever due to historically low interest rates. If interest rates stay low, the bonds will produce yields that are often lower than the inflation rate. As a result, the Social Security surplus will disappear faster without a steady source of income to stabilize it.

Future legislation could very well address the insufficiency of Social Security and take measures to shore up the program, but seniors can’t count on the survival of an issue that is a known political football with a host of sustainability issues. A life settlement can be an ideal way for many seniors to secure a cash windfall in exchange for an unneeded life insurance policy, and the proceeds from the settlement can help fund retirement expenses that Social Security once covered for past generations. For more information about life settlements, contact Magna today.

Get cash for your policy and
start living a better life now


Thanks for calculating your policy value with us

Let’s discuss your life settlement options and next steps. Please enter your email. We will not sell or disclose your information.