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What are the alternatives to life settlements?
Life settlements haven’t been around that long. Before they
were available, people had other strategies for accessing
money in their final years.
Although life settlements may be uniquely well-suited to
meet the needs of some, they are not the best option for all
people diagnosed with a terminal illness (or for all investors,
for that matter).
Accelerated Death Benefits (ADBs) are provision of many life
insurance policies which allow the insured to receive some
of his or her death benefits right away, if they meet the
eligibility requirements (such as having a terminal illness).
The beneficiaries still receive a death benefit, albeit reduced
by the amount of the advance. More and more life insurance
policies are making the option of accelerated death benefits
available. They may be automatically included in a policy,
or they may be purchased as a rider. Sometimes, you can even
add accelerated death benefits to a policy after you are diagnosed
with an illness.
Another possibility is taking out a regular loan from a bank.
Assets such as art, jewelry or other valuables can be sold,
or used as collateral in securing a loan. If you own a home,
for another example, you may be able to get loan against that.
He can set up a pseudo-life settlement situation with a friend
or family member - borrowing money in exchange for naming
them the beneficiary of the policy. Also, whole life insurance
builds cash value over time, which the policy holder may be
able to use.
Limits
of life settlements
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