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Life Insurance & its Hiddden Benefit

It can’t be stressed enough that any life insurance policy should be considered as a financial investment. Just as all other assets, there is a value behind your policy. Not only is there a face value (typically, what will be paid upon the insured’s death), but also a lesser value paid by the buyer that will be given in order for the face value to be collected once the insured person passes away.

Selling rights to life insurance policies was a major concept that first began in the late 80s, during the AIDS epidemic. Certain patients were left unemployed, while others simply needed a way to come up with excessive funds for the necessary medical treatment. For these patients, selling their life insurance policy was a prime opportunity to give anyone with AIDS money instantly.

Buying life insurance policies became a huge fad, because many believed that most of these sellers only had a short period left to live.

Once AIDS went from being a definite death sentence to a chronic, not necessarily fatal disease for those in the United States, the market for patients looking to raise fast cash also diminished.

After the AIDS pandemic declined the market for buying life insurance policies did not completely disappear. In fact, it opened up doors for a new market, which just so happened to be those approaching their 70s. Even today there currently remains a major market of interested buyers.

The sale of a life insurance policy can be known as two different things. A viatical settlement, which means that the insured is not expected to live over two years or simply a life settlement.

The minor difference comes in terms of tax consequences.

Life insurance experts such as Gloria Grening Wolk, the author of “Cash for the Final Days”, suggests that if you chose to sell your life insurance policy at any age that you don’t go with the first one who makes an offer.

Just like buying a house, you should shop around to see what others are willing to give you for the same product.

A financial planner in Newton, Mass., Jonathan D. Pond, suggests that selling a life insurance policy before one dies can definitely make sense in some circumstances.

“If you really need the cash, it’s certainly worthwhile to consider,” said Pond.

Pond generally instructs his clients looking to make money to always look around for other sources of income such as home equity loans, reverse mortgages, and the surrender or loan value of whole-life insurance policies.

It is important to realize that on a typical policy there is a substantial amount saved as a death benefit, so even if you choose to sell your policy, the policy’s holder may not be able to receive as much cash as a potential buyer would. The individual payment depends on factors such as age, gender, health, life expectancy, type of policy and its specific cash value.”

If you have any questions regarding life insurance or wish to purchase a policy which would build cash value over the years please contact ASJ Insurance & Financial Service Inc. at (602) 212-1048 or visit their website at www.asjtermlifeinsurance.com to get an instant term life insurance quote.

ASJ Insurance & Financial Service Inc. work with many leading top rated insurance companies like The Hartford, MetLife, Lincoln Financial, ING, West Coast Life, Ohio National, Lincoln Benefit Life, AXA Equitable, Pacific Life, American General and many other companies. The experts at ASJ Insurance & Financial Service Inc. will work with you to guide you and get you the best possible price.



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