Over the last few years, The O’Donnell Group has seen an increase in demand for life settlements. In fact, Google is reporting that searches related to the life settlement market are on the rise again as well.
In fact, nearly all 50 states have some kind of life settlement regulations in place to increase transparency and protection for those policyholders, especially seniors, considering a life settlement transaction.
The change in the regulatory environment has seemingly lead to an increase in seniors looking into the life settlement option and has also lead to an increase in the amount of reliable informational resources available to consumers to reference the life settlement market.
The Life Settlement Option Becoming More Common
Life settlements are still very misunderstood and most policyholders are still unaware that the option even exists! However, it is gaining traction among seniors looking for a better payout than merely accepting the cash surrender value or even worse, lapsing the policy altogether.
In fact, a couple out of California who was unaware of the life settlement option recently successfully sued their insurance providers for failing to disclose a life settlement as an option. As a result, the couple was forced to reduce the size of their life insurance policy twice from the starting point of $7.2 million to $2 million because the premiums continued to rise and they could no longer afford to keep the policy in force.
The couple claimed that their insurance provider (Lincoln National Insurance Company) offered only two options to them. They could choose to surrender their policy for it’s cash value or they could pay higher premiums for the policy. No mention was ever made of their ability to sell their policy to a third party.
Rightfully so, the judge agreed with the plaintiffs that the insurance provider had a duty to disclose this option to the policyholder in a ground-breaking decision that could very well reshape how insurance companies treat their customers in the future.
Knowledge is certainly power and the more you know about your options when it comes to insurance policies and life settlements, the better prepared you will be to make an informed decision about your life insurance choices.