Life Settlements: How Seniors Can Effectively Use Their Lump Sum Payouts

Aug 27 11:09 2009 David Mickelson Print This Article

Life settlements provide great opportunities to qualified seniors who can no longer afford or no longer need their existing life insurance policies

A life settlement,Guest Posting also known as a senior settlement, refers to the sale of a life insurance policy by a policy owner to a third party investor. After the sale, the investor is responsible for the policy, including paying off the monthly premiums. The investor then collects the benefits when the insured individual dies. Having the option to sell an existing life insurance policy gives seniors more flexibility, and they also have the comfort of knowing they’ll have an option to get out of the policy and its monthly premiums if needed.

Because life insurance policies can be one of senior citizens’ most valuable assets, seniors should make sure to constantly monitor their policy’s settlement value just like any other investment. In the event that a policyholder qualifies for a senior settlement and decides to sell their insurance policy, they will receive payment in the form of a cash lump sum. This article covers some of the ways in which recipients can put this settlement money to good use.

Pay Off Any Outstanding Bills

Many seniors who don’t need a new life insurance policy choose to use their senior settlement to pay off bills. The large payment from selling off a life insurance policy can be very helpful in paying off expenses such things as a mortgage, credit card debt, or medical bills. A senior settlement can also reduce monthly bills by reducing the high insurance premiums that can be associated with having a life insurance policy. Qualified seniors who choose to receive a settlement often do so because they’d rather have some money now instead of having one spouse receive a large death benefit an undetermined number of years in the future.

Enjoy World Travel

Another great way to spend settlement money is using it to travel around the world. If you don’t have any significant financial problems and are in good health, traveling to places you’ve never seen can be an incredibly rewarding experience, especially if you’re retired and have an abundance of leisure time. Through their lump sum payouts, seniors are now able to experience exotic worldwide vacations they have once only dreamed of taking.

Reinvest The Payout Into A New Policy

In addition to paying off bills and world travel, many seniors are taking part in a new trend in the financial world: using their life settlement money to "trade up" to a better life insurance policy. You might find that you are able to reinvest your senior settlement into a new policy with lower monthly premiums and better terms. If this is an appealing option, make sure you’re aware of the value of your current settlement, along with the premiums and terms of possible life insurance policies. Being aware of these things will allow you to sell and buy at the best possible time.

For seniors who find that they can no longer afford or no longer need their life insurance policies, a life settlement can be a great option. After you sell your policy, the cash lump sum payment received can be used to reinvest in a new, better life insurance policy, pay off pressing bills, or even travel around the world. No matter what you choose, it’s important to discuss your options with a professional, qualified life settlement broker to confirm that selling your life insurance policy is the right choice for you.

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About Article Author

David Mickelson
David Mickelson

David Mickelson is a writer for David Mickelson Insurance Services, offering life settlement services and brokers. Mickelson Life specializes in providing financial services and senior settlements with the utmost care and respect for each client's unique situation.

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