Survey Shows Most Seniors Allow Life Insurance To Lapse
September 20, 2013 by Proquest LLC
In a survey conducted by ICR for life settlement provider The Lifeline Program, 55 percent of seniors have allowed their life insurance policies to lapse, viewing it as a liability instead of an asset.
According to a release, further, more than 80 percent of adults aged 66 and over were not aware that they can sell an existing life insurance policy for a cash payout.
The survey uncovered that for 24 percent of respondents the reason they first bought life insurance has changed, and anxieties about paying for long-term healthcare still weigh heavily on seniors as two-in-five are concerned they will not be able to pay for long term medical care during their retirement years.
“The results indicate that a large segment of the senior population allows their life insurance policies to lapse and receive nothing in return,” said Wm.Scott Page, president and CEO of The Lifeline Program. “We have always known that lapse rates were high, but this new data proves that hundreds of thousands of seniors who are eligible for life settlements are not taking advantage of the financial option.”
A life settlement, the company said, is the sale of a life insurance policy for less than its face amount, but for more than the cash surrender value. The buying company pays the remainder of the policy premiums and collects the full benefit when the policy seller dies. Often a settlement provides five to eight times the amount offered if the policy was surrendered back to the insurance company.
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