Understanding Life Settlement Opportunities
This article explains the essentials of life settlements, highlighting their origins, benefits, and key industry players. It discusses how seniors can sell their life insurance policies for immediate cash, the regulatory landscape, and introduces leading companies in the market. A useful guide for seniors and investors interested in financial planning and asset liquidation strategies.
Life insurance remains a critical financial tool, especially for individuals with dependents, business partners, or organizations as beneficiaries. The concept of selling life insurance policies, known as life settlements, originated in 1911 when lawmakers established the framework for these transactions. It became more prominent in the 1980s, influenced by medical and technological advancements. Typically, individuals aged 65 or older, who are not seriously ill, can sell their policies for a lump sum, transferring future premium responsibilities to third parties.
Different states have varying regulations, including waiting periods, that policyholders must observe before selling. The life settlements industry is vital for providing retirement income and long-term care solutions for senior citizens, especially those in middle and lower-income brackets.
Two leading companies facilitate life settlements:
Welcome Funds
Ovid Life
Founded in 2000, Welcome Funds has assisted thousands by offering access to over 10,000 life settlement deals. The firm compares policies to determine viability, aiming to connect sellers with multiple buyers in the secondary market, resulting in over $450 million in transactions. They evaluate eligibility and provide detailed guidance throughout the process.
Ovid Life operates with the motto, “We are consumer advocates,” making it one of the industry’s top players. The platform is free to use, offers competitive fees, and connects sellers online with licensed institutional buyers. In 2017, Ovid facilitated around $1.8 billion in life insurance policies, with sellers typically receiving about 22% of the policy’s value before settlement.
