Financial planning and life settlement calculator, a developing process that lessens worries about money, helps you save for a rainy day, and sustain your financial needs. It includes your savings, investments, debts, income, insurance, and any other aspects of your financial life. It is necessary because it gives the opportunity to make the most of your belongings. Likewise helps achieve at the same time balance your short term and long-term goals. Most of it all, it is a good technique to enjoy your incoming golden age.
Right away, I’m going to walk you through the two good financial planning strategies focused on seniors and their importance.
What is a Senior Life Settlement?
Life settlement or Senior Life Settlement is the process of selling an insurance policy to a third party for a one-time cash payment. An insurance policy is a contract signed between the insurer (owner of the insurance company) and the insured (policyholder). The price of that said insurance is usually higher than the surrender value but lesser than the overall death benefit. Surrender value is the amount the insured or policyholder secures once he/she decides to terminate or surrender the policy before its maturity date. While the death benefit is the payment to the beneficiary of a pension or life insurance policy when the policyholder dies.
Why choose a life settlement?
Provides cash right away. The life settlement company will provide right away a sum of money which will help you with your current expenses. The amount is also enough to nurture or sustain you through your continuing years. Most people choose life settlements when they no longer need it or they need cash for unanticipated payments- for example medical treatments not covered by the insurance policy. That means you may have more savings to enjoy your retirement.
Most policyholders are being regulated. Around 90% of the population are being protected by legal regulations. LISA (Life Insurance Settlement Association) has bylaws and code of ethics causing them to strictly monitor life insurance settlements and the regulations. Your right to be given ample time to decide and to be less pressured will be respected.
You will have more. Rather than putting your insurance on lapse for the reason of not being able to afford the premium, selling the insurance itself makes you have more. If the insurance lapsed, you will just get a portion of surrender value.
Assists in funding for long term care. You may also request a specialized account for your long-term care needs – including residential facilities, in-home care, and nursing homes. By requesting the life settlement company to use the proceeds in funding the type of long-term care that feels that works best for you. The remaining amount of money or the excess will always go to your beneficiary.
Larger settlements are available once you are 70 older. Life settlement benefits are obtained generally once you, the insurer, turn 70 and above; sickly or have been diagnosed with only 2 years or less to live. Otherwise, you may only avail 20% up to 30% of death benefits’ value.
What is a reverse mortgage?
This is a type of loan available to senior homeowners by selling a portion of their home equity to a lender. The value of their home will then be computed and will receive a lump sum, a line credit, or a fixed monthly payment. This is perfect for seniors whose net worth was mostly invested in the value of their homes. It is called a reverse mortgage because the traditional mortgage practice was being inverted. The lender was obliged to submit monthly payments to the borrower instead of the borrower. The borrower’s payback will be when the home is sold or vacated.
Why choose a reverse mortgage?
It can be a lump sum or as a line of credit. Although it sounds more like a home equity loan, reverse mortgage always provides an option to the borrower to choose for, depending on their types of needs. They can offer an amount of money for emergency expenses or a line of credit, which is a good way of providing your basic needs worrying less about where to get an income.
A good catch for seniors at 62 and older. Having your home as one of your best assets? At the age of 62, you can avail of the said reverse mortgage.
You may remain the owner of your home. A reverse mortgage gives you the option to keep your home. Whether you want to keep it in the end have your heirs or relatives inherit it. One of the misconceptions of this home equity loan is you lose your precious home once you applied for it. Not at all, as long as you comply with the company’s terms, pay for the home owner’s insurance, and pay for your property taxes, your home will not be stirred.
You are secured in case there is a decline in the housing market. Since the federal government insures the reverse mortgage loan, it comes with greater security. In addition, if the house value ended either way, that the home was sold even more from its original value, the government insurance will cover the difference. Which makes it a good option to consider when planning to sell a home into the future.
Most people don’t have enough cash to make their retirement comfortable. These sound planning strategies are designated for retirees like you. It is essential to understand the terms and conditions of each strategy as well as its pros and cons. Then assess if you qualify. You may also compare what works best for you. You may choose both senior settlement and reverse mortgage too. Your retirement years will be well covered since these two techniques complement each other.
Still can’t decide? You may seek assistance to trusted life settlement or an insurance broker. Wishing you more joy in your golden years.