A life settlement is a single transaction, therefore, certain criteria must be met in order to be eligible for a life settlement or viatical settlement.
When you sell your life insurance policy, you will receive a one-time cash payment and you no longer pay the premiums.
The following factors determine the potential value for a life settlement.
- your age
- state you live in
- health condition
- type of insurance policy (Universal, Whole, Convertible term, Variable etc.)
- the policy pay out amount (death benefit)
- how much are the premiums
- your contact information
The Age of the Policyholder
Typically, those who are 70 years of age and older have a higher chance of finding a buyer willing to make an offer to purchase the life insurance policy for a life settlement.
Health Status and Life Expectancy
Your personal health status has an impact on life expectancy which affects the value of the life insurance policy. The longer the expected life span, the lower the policy’s value as the buyer continues to pay the premiums until they collect the death benefit.
The following 4 health categories are those to choose from that best describe your health.
- Healthy: Active and exercise regularly
- Minor Conditions: Medical conditions that require management such as diabetes or high blood pressure
- Serious Conditions: Serious medical conditions such as cancer, Alzheimer’s, heart disease, stroke
- Terminal Conditions: End-stage of life conditions such as late-stage cancer, congestive heart failure, liver, pulmonary disease