Although there are a variety of situations that could lead seniors to liquidate their life insurance, one of the most prevalent is to facilitate the funding of long-term care costs.
Irvine, California (PRWEB) March 21, 2017
Seniors in the United States have been devastated by skyrocketing long-term care costs. Due to this crisis, many astute advisors are recommending that their senior clients tap into an often overlooked or hidden asset--their life insurance policies.
In the past decade, it has not been uncommon for long-term care expenses to rise by up to 50%. Although Medicare can cover some long-term care costs, the coverage is less than comprehensive. Due to this and other factors, more then 10 million individuals have looked to long-term care insurance policies to supplement the shortfall. Unfortunately, the surge in the number of individuals needing long-term care, increasing life expectancies, low interest rates, and economic swings have forced insurance companies to elevate their premiums on this coverage. Prices for long-term care insurance in some areas have increased by over 50% with major companies such as John Hancock, while premiums with long-established names such as Prudential have seen a 39% spike in areas such as Florida. These premium increases, along with the growing number of people entering long-term care facilities, have created an immense need for alternative sources of liquidity.
Savvy financial advisors and estate planners have long known that an individual’s life insurance policy is an asset that can be bought and sold like any other property. Initially, policies were typically liquidated in transactions known as vitaicals, when the policyholder was terminally ill and had a short life expectancy. In the past decade, life settlement transactions, which are more flexible, have been increasing rapidly.
A life settlement is the sale of an individual insurance policy in the secondary market. The distinction between life settlements and viaticals is the current status of the insured. With life settlements, the insured is not terminally ill; rather, they are typically over age 65 and have experienced changes in circumstances that have motivated them to consider selling their life insurance policy. Although there are a variety of situations that could lead seniors to liquidate their life insurance, one of the most prevalent is to facilitate the funding of long-term care costs.
The ALIR Settlements team has been working with financial advisors, estate planners, and directly with seniors to help educate and instruct individuals how to effectively navigate the life settlement industry. In the past decade, with increasing regulation and organizations like LISA.org directing the market, the safety and liquidity of the life settlement industry have been expanded immensely. Through their online portal at alirsettlements.com, ALIR Settlements is making available some of the most seasoned and knowledgeable life settlement experts to instruct seniors and financial planners how best utilize these unique instruments to fund long-term care.
For individuals in need of a solution to their long-term care expenses, over age 65 and possessing current life insurance, this life settlement training may be beneficial.