Life settlements can help pay for medical expenses, healthcare, and retirement. But many people are hesitant to sell their life insurance policy because of misinformation about life settlements. So what’s the truth, and what’s just myth? Here are some of the most common myths about life settlements, debunked.

Myth #1: You must be terminally ill to qualify for a life settlement.

To qualify for a life settlement, you must be in good health and 76 years of age or older. Additionally, your life insurance policy must be worth at least $100,000. 

Although you must be in good health to qualify for a life settlement, individuals with life-threatening diseases, such as cancer and Alzheimer’s, may be eligible for a viatical settlement. Viatical settlements require a life insurance policy worth at least $100,000, and the policyholder must be terminally ill.

Viatical settlements can give policyholders financial peace of mind while receiving medical care. Essentially, viatical settlement companies will offer to purchase your life insurance policy for a lump-sum payment. Selling your life insurance policy to a viatical settlement provider can benefit patients and their families in a variety of ways by providing policyholders with immediate payment.

Myth #2: Most people sell their life insurance policy to pay for medical expenses.

People choose to sell their life insurance policies for a wide range of reasons. While some use their life settlement to pay medical bills, others sell their policy to avoid paying costly premiums. 

Some policyholders choose to sell their life insurance policy after their children become financially independent. After your children grow up and earn their own income, they won’t need your life insurance policy for financial support.

If you have a terminal illness, you may choose to use your settlement to pay for high-quality medical care or assisted living. To find out more about assisted living, reach out to Victoria Mews assisted living in Boonton, NJ.

Myth #3: A life insurance policy must be worth over $1 million to qualify for a settlement.

While it’s true that some investors tend to express interest in high-value policies, most are interested in purchasing policies worth at least $100,000. In many cases, the face value of your life insurance policy, together with the premiums you now pay, determine your life settlement offer. The higher your life insurance policy is valued and the lower your premiums are, the more you can expect to be offered by a life settlement provider. 

If you’re not sure how to sell your life insurance policy, don’t worry. Companies like the American Life Fund connect clients to life settlement companies, so you’re guaranteed to find the best offer for your financial situation.

Myth #4: The government restricts how you can spend the proceeds from your life settlement.

The government does not regulate how individuals must spend the proceeds from their life settlement. Instead, you’re free to use your life settlement however you want. 

Depending on your financial situation, you might choose to pay off existing debt, invest in medical care, or donate to your favorite charity. Some individuals also choose to provide financial assistance to their families.

Selling your life insurance policy for a lump-sum payment also adds to your retirement income, and you’ll be able to use the cash as you need. A life settlement makes it possible for you to live out your dream retirement life, take a vacation, or simply gain financial peace of mind.

Are you considering selling your life insurance policy?  If you’re not sure where to start, fill out a quick and easy online application through the American Life Fund to find out if you qualify. After you receive offers from settlement companies, you can choose the best option for your financial situation. Whether you need to pay for medical expenses or retirement, selling your life insurance policy can be a lucrative source of income.