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A life settlement can be a source of cash for those looking to get out of their life insurance policy or are just in need of some extra expenses for a financial emergency.
There are many factors to consider when choosing from the many life-settlement companies out there. Below, you’ll find a list of the best life-settlement companies to help you make an educated decision on how to close out your policy.
Compare the Best Life Settlement Providers
Take a look at the list below.
1. Coventry Direct
A Pennsylvania-based company, Coventry Direct spearheaded the life-settlement industry after structuring the first life-settlement transaction in the industry more than 35 years ago. The company’s life-settlement process is easy and straightforward, requiring little prior research to get started. You simply provide Coventry with basic personal and policy information, and the company will send you a life insurance settlement offer.
You must meet certain requirements to qualify for a life settlement from Coventry, including being 65 years or older with a policy death benefit of more than $100,000, in addition to a life expectancy of less than 20 years. The company’s long-standing reputation makes it one of the best life-settlement providers in terms of longevity and financial strength.
Pros:
- One of the largest life-settlement quote providers in the country
- Retained death benefit option
Cons:
- Age requirement is 65 but can be waived if you have a life-threatening illness or condition
- Slower sales process than other companies
2. Abacus Life Settlements
Abacus is a bit newer to the industry, but this Florida-based company is fast growing. Abacus is considered to be one of the best life-settlement companies because of its speedy process and closure, making it a potentially beneficial choice if you’re looking to close out on your insurance as quickly as possible.
The underwriting process is expedited because of its artificial intelligence sales process. You can get a quote within 24 hours, and it completes life settlements in as little as 14 to 21 days. To get a life settlement with Abacus Life Settlements, your insurance policy must be convertible universal, term or whole life and have a death benefit of at least $100,000.
Pros:
- Quotes in as little as 24 hours
- Quick life settlements
Cons:
- Availability is limited to certain states
- Phone interview process may only provide a general idea of your total settlement
3. Institutional Life Services
Institutional Life Services, founded by Goldman Sachs Group (NYSE: GS) and Genworth Financial Inc. (NYSE: GNW), can be a beneficial choice if you’re searching for a life-settlement company that doesn’t require a massive death benefit to claim a quote. Institutional Life Services accepts policies with a benefit as low as $50,000, which is considerably less than most other life-settlement companies tha may start acceptances with $100,000 minimum death benefits. To qualify, you must be 65 years or older and have documented a health change within the last three years.
Pros:
- Smaller policies accepted
- Cloud-based servicing platform available 24/7
Con:
- Not much information available on the company’s website
4. Habersham Funding
Habersham Funding’s team has more than 100 years of collective experience with life settlements.The Georgia-based company offers some of the highest payouts in the industry, in addition to having a leading fraud-prevention process. To qualify for a life-settlement quote with Habersham Funding, you must be 65 or older, have a life insurance policy with a face value of at least $100,000 and have owned your policy for at least two years.
Pros:
- No medical exam required for settlement
- More personalized customer service
Con:
- Longer, more in-depth sales process when compared to many other life settlement companies
5. Magna Life Settlements
Established in 2004, the Texas-based company offers extensive consumer information to keep its customers educated and remain fully transparent. The company provides a free life-settlement calculator, a robust company blog, a YouTube channel and numerous in-depth white papers to help you understand all your life-settlement options. To sell your policy through Magna, you must be at least 65 years old or have a qualifying health issue to receive a quote. Your insurance policy must be term, whole life or universal with a benefit of at least $100,000.
Pros:
- Exceptional resources and information on website
- Viatical settlements available
Con:
- Not available in all states
Q Capital Strategies
Q Capital Strategies is a New York-based company founded in 2004 but claiming more than 50 years of experience in the industry. It boasts exceptional customer service and transparency, along with itsr unique in-house QUOTE system to complete complicated processes and analysis faster and more accurately. The software system helps the company be industry leading in innovation, which helps you get your life-settlement quote online.
To qualify, individuals must be 60 years or older and a resident of the United States. The death benefit of the policy must be at least $50,000, which is lower than industry standard. The sales process takes between 30 and 60 days, which is on the longer side. The company purchases most types of life insurance policies.
Pros:
- Innovative quotes process
- Can sell a policy at age 60 with a benefit as little as $50,000
Con:
- Not available in all states
What Is a Life Settlement?
A life settlement is when a policyholder sells their life insurance policy to a third party and gets a one-time cash payment in return. The settlement is typically less than the death benefit but more than a surrender value. The third party assumes the role of the policy’s beneficiary and takes over paying the premiums. The purchaser then receives the death benefit upon the insured’s death.
Benefits of a Life Settlement
Whether you simply don’t want the policy anymore or you can’t make your monthly payments any longer, a life settlement could be beneficial. There are several benefits to life settlements, including:
- Payout higher than surrender value: The surrender value of a policy is the amount of money a policyholder gets when accessing the cash value of their policy. When a policyholder sells their policy, the payout is typically much higher than the surrender value would have been.
- Cash for unexpected expenses: Whether it’s an emergency or another unexpected expense, a life settlement allows you to get the cash to help pay for it so you don’t need to worry about how you’ll be able to cover the expense.
- Pay off debt: A life settlement can give you the funding to pay off any debt you may have.
- Retirement or travel funding: Whether you’ve been wanting to travel globally or locally, or you would simply like to settle into retirement not needing to worry about money, a life settlement can help achieve that when you no longer need your life insurance policy.
- Open a business or pursue another hobby: The cash from a life settlement can help you to fund a pursuit that you otherwise wouldn’t have the funding for.
Know Your Life Insurance Options
If you can no longer afford your life insurance premiums, you do have options. No matter whether you decide to surrender your policy or sell it via a life-settlement company, exploring all your options and doing your research is the best place to start. Return to Benzinga for more information and reviews on life-settlement options, insurance policy choices and more information you need to know.
Frequently Asked Questions
Is a life settlement a good idea?
A life settlement is a way to get a cash payout, but it may not be a good idea for everyone. If you find your policy is no longer needed or you can no longer afford the payments, then yes, a life settlement may be a good option for you. However, options that may work better for you than a life settlement include surrendering your policy or checking for accelerated death benefits.
How much is a life settlement worth?
A life settlement’s worth varies from company to company, policy to policy and policy owner to policy owner. A life settlement typically reflects the policy’s death benefit, so the bigger the death benefit, the bigger the life settlement. A life settlement will typically be around 20% of your policy’s size.
Methodology
Benzinga crafted a specific methodology to rank life insurance. To see a comprehensive breakdown of our methodology, please visit our Life Insurance Methodology page.
About Sarah Horvath
Sarah Horvath is a highly respected freelance senior copywriter specializing in insurance content. With a wealth of experience, she is recognized as one of the top insurance copywriters in the industry. Sarah’s expertise encompasses various aspects of insurance, including home warranties, life insurance, health insurance, and more. Her insightful articles and guides are regularly featured on major finance sites, providing invaluable information to readers seeking to navigate the complexities of insurance policies. Known for her clear, concise writing style and comprehensive understanding of insurance products, Sarah is dedicated to empowering individuals with the knowledge they need to make informed decisions about their insurance coverage.