Benefits of permanent life insurance
Life settlement, one of the hidden benefits of permanent life insurance. One of the hidden benefits of some permanent life insurance is that it is a financial asset. In other words, in addition to the usual death benefit, they can be sold and obtained cash.
In other words, the insured can do what is known as a life settlement- and obtain cash for his life insurance.
The life settlement works as follows. If the insured no longer needs the insurance, because their beneficiaries have died, or they cannot continue paying the monthly premiums, or they realize they need the money for their old age, then they can sell their permanent life insurance policy to a third party -a investor-. It will pay you the agreed amount all at once, which will be more than the total premiums paid so far, but less than the death benefit amount listed in the contract. The good thing about this life agreement is that the money is tax free and in addition to not being able to continue paying the insurance premium, the contract would be canceled and you would lose all the money invested until then.
By selling the policy, the new owner acquires the life insurance contract with all its obligations and benefits. In other words, he will be in charge of continuing to pay the premiums and when the insured who sold the policy dies, the new owner is the one who collects the death benefit.
If you have questions about life insurance, contact Univista Insurance. Life settlement, one of the hidden benefits of permanent life insurance.