Any X-Files fans out there? I don’t know about you, but I still enjoy catching reruns of this classic show about two FBI agents whose job it is to investigate supernatural occurrences, aliens, and UFOs.
If you’ve seen any episodes yourself, you probably know a decent amount about Unidentified Flying Objects. In the show, they’re mysterious, rarely seen, and there’s a constant question of whether they have good or evil intent.
If you think about it, UFOs can be compared to life settlements. In fact, maybe UFO could stand for “Unidentified Financial Objective”. Although some people may have heard about life settlements, there’s a good chance that most know more about the X-Files kind of UFOs than they do this potentially life-changing financial transaction.
Life settlements are a way for people who have life insurance policies they no longer need to sell them to investors for a lump sum, which is often for many times the cash value of the policy.
For example, let’s say a senior wants to better fund his retirement. He has a $750,000 life insurance policy that he no longer needs, with a cash surrender value of $3,800.
Instead of surrendering the policy, he works with his financial advisor to sell the policy on the Secondary Market through a broker, like the Ashar Group. After going through the transaction process, the seller walks away with $175,000—a great deal more than he would have received if he simply surrendered the policy.
Unfortunately, surrendering their policies is what many people do, often because they just don’t know—and their financial advisors don’t tell them—about the possibility of a life settlement.
That brings us back to the idea of UFOs. There’s plenty of conflicting information out there about life settlements, mainly because when the Secondary Market emerged about 20 years ago, it wasn’t well regulated. That led to a greater potential for unethical buyers to take advantage of policy owners.
Today, however, the Secondary Market is very well regulated, with consumer protections in place to guard against unscrupulous behavior. Policy owners should still work with a licensed, reputable financial advisor, however, to guard against fraud and ensure that they receive the best possible offer for their policy.
And unlike those questionable UFOs, life settlements can have definite benefits for many policy owners, enabling them to fund long-term care, boost their standard of living during retirement, or make a large gift to a charity. Since the cash received from the life settlement belongs to the seller, with no strings attached, the possibilities are endless.
So the next time you’re watching the X-Files, you might want to consider the other UFO—the Unidentified Financial Objective. Even though life settlements are still somewhat unknown among non-finance professionals, they are nothing to be feared. On the contrary, they can provide wonderful benefits for many individuals who have life insurance policies they no longer need. If you think that a life settlement could be a prudent decision, contact Ashar Group today!