What is Reverse Life Insurance?
viaticals While it’s common knowledge that life insurance policies are designed to provide monetary benefits to beneficiaries after the policyholder’s death, these policies also have other versatile uses. For example, life insurance policies can be leveraged to cover expenses like medical bills or debt while the policyholder is alive.
Few people know they can sell their life insurance policy, but this is becoming a more common practice. Referred to as ‘reverse life insurance’ or ‘life settlements,’ this process essentially converts a policy into immediate cash value. Converting a policy to cash can be an ideal choice for those requiring immediate financial assistance.
What is Reverse Life Insurance? How Does it Work?
viaticals ‘Reverse Life Insurance’ and ‘Life Settlements’ are terms that many confuse, though they have distinct meanings. While both entail exchanging death benefits for cash, they differ in scope.
Reverse Life Insurance broadly encompasses options for turning life insurance policies into liquid assets. Life Settlements, on the other hand, refer specifically to the sale of a policy to a third party for more than its cash surrender value.
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