Life Settlements Quotes – Sell your unwanted policy

Life Settlements – Viaticals

A Life Settlement or  Viatical (less than 2 year life expectancy) is when you  sell of a life insurance policy that you no longer want  to a licensed third party (buyer).  You get more than cash surrender value, but is less than the face amount or death benefit.  Lisa Rehburg Life Settlements * pdf  * Investopedia *   plymouth


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my mother wants to cash in her life insurance, she has approx 9,000, is it better to cash out or take out a loan?

if she takes a loan does she need to pay it back, if she takes cash does she have to pay taxes?


***Generally it’s better to take a loan.  That way you still have the policy in force.   You don’t have to pay back a loan.  The company might bill you for the interest though.  Does she need the whole 9K now or would it be better to borrow say $1k/year?

Depends on how much she has paid into the policy.   Anything less than $9K – there would be tax on the difference.  That’s why a loan might be better.

What’s her tax bracket?   $1k/year would be lower taxes than 9K at one time.

her income is approx (social security  only) $7,644/yr, which ss is not suppose be taxable.

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