<\/p>\n <\/span> <\/p>\n <\/span> <\/span> <\/p>\n <\/span> <\/p>\n By Bryan Nicholson<\/strong><\/p>\n Retirement security has become one of the top domestic policy issues to be discussed this year \u2014 and for good reason. A survey released by AARP<\/a> indicates that a majority of U.S. adults may be at risk of a retirement savings gap, with 59% of respondents saying it was only \u201csomewhat likely\u201d to \u201cnot at all likely\u201d that the combination of their savings, investments and Social Security benefits would be sufficient to cover their financial needs throughout retirement.<\/p>\n The good news for those in the process of saving for retirement is that Congress appears to be on the verge of taking action to make things a little easier. The House of Representatives recently passed a bipartisan bill<\/a> (The SECURE Act), which incorporates measures from the Senate\u2019s own Retirement Enhancement and Savings Act of 2019. These bills would provide U.S. workers with expanded opportunities to participate in employer-provided retirement plans and create other reforms to improve Americans\u2019 retirement security.<\/p>\n But what about those Americans who are already deep into their retirement years and whose age or health precludes their ability to generate more income? What can be done to deal with the retirement security challenge for seniors who have more narrow options to fund their retirement, which \u2014 thanks to improvements in longevity \u2014 can now stretch for many years longer than they may have anticipated?<\/p>\n Life insurance can play an important role in this picture. A product that functions as a risk management tool during a person\u2019s working years, providing financial security for family members in the event of the untimely death of the insured individual, can serve as an income-producing asset during that person\u2019s retirement years.<\/p>\n Many seniors think their only options with a life insurance policy are: 1) To keep the policy in-force until they pass away; or 2) If the policy becomes unnecessary or unaffordable, to lapse or surrender it back to the insurance carrier. In fact, each year seniors older than 70 lapse or surrender hundreds of thousands of life insurance policies, with a combined face value of more than $50 billion, according to<\/a> our association\u2019s research.<\/p>\n However, your clients have alternatives that are more beneficial than simply surrendering the policy. For example:<\/p>\n Of these options, the one that can actually put the most amount of cash directly into your clients\u2019 pockets is a life settlement. Life insurance is personal property, so your client can sell it just like any other asset they own. When they decide to sell the policy to a third party \u2014 rather than surrendering it to the insurance company \u2014 they get more than the cash value, but less than the death benefit amount. The buyer of the policy takes on all future premiums and receives the death benefit when your client dies.<\/p>\n In order to qualify for a life settlement, your client must be 65 or older with a life insurance policy that has a death benefit of at least $100,000. The amount of their potential settlement will depend on several factors, including the death benefit, the annual premiums that the buyer will be required to pay, and the number of years the buyer can expect to continue paying those premiums (the insured\u2019s life expectancy). But on average, a life settlement yields seniors five to seven times the amount of the policy’s cash surrender value.<\/p>\n \u201cThe American ideal of a happy, secure retirement is under threat as the economy changes and the financial foundations that supported previous generations erode,\u201d according to<\/a> a 2018 report in Politico<\/em>. Now that retirement security is front and center as a domestic policy issue in the U.S. Congress, there are reasons for optimism that this burden may be eased in the coming years for those who are currently saving for retirement.<\/p>\n But seniors who are already living in retirement have a more narrow set of options. By wisely leveraging one of the oldest financial products in existence \u2014 the trusty life insurance policy \u2014 retirees may be able to generate cash flow to help improve their retirement security.<\/p>\n Bryan Nicholson is executive director of the Life Insurance Settlement Association. Bryan may be contacted at [email protected]<\/span><\/a>.<\/span> <\/em><\/p>\n \u00a9 Entire contents copyright 2019 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.<\/span><\/strong><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n
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