August 15, 2022
Did you know you can benefit from your life insurance while you are living? Selling a universal or whole life (and sometimes even a term life) insurance policy can be an excellent way to provide the liquidity you need without risking your home.
In this article, we’ll provide an overview of why life settlements are preferred over reverse mortgages for three reasons:
If you have any questions, you can contact us, and one of our experienced life settlement specialists will be happy to help you.
If you’re a senior, the chances are good you’ve seen a famous celebrity on television pitching reverse mortgages, or you’ve received numerous pieces of mail touting their value. While reverse mortgages are becoming a bit better known because of the advertising, some confusion still exists.
Let’s look briefly at reverse mortgages, their pluses and minuses, and consider why a life settlement may be a better choice for you.
What is a reverse mortgage?
A reverse mortgage is a means for people age 62 and over to get equity out of a home they own outright and convert it into spendable cash. It’s called a reverse mortgage because instead of making a mortgage payment to the bank every month, the bank pays you.
While a reverse mortgage isn’t a home equity loan, it is still a loan and must be repaid eventually. The payment being made to you is charged interest, which accrues and must be repaid when your loan becomes due, with is usually within one year of when you move out of your home or when you die.
Drawbacks of a reverse mortgage.
There are some cons to reverse mortgages, which include:
With a reverse mortgage, your home can be foreclosed on if you:
Like traditional mortgages, there are fees and expenses associated with reverse mortgages, including:
Having a reverse mortgage can cause you to violate asset restrictions for the Supplemental Security Income (SSI) and Medicaid programs, which can be costly as it relates to paying for extended care later in life.
Because of the potential pitfalls, an attorney specializing in elder law should be consulted before applying for a reverse mortgage.
Life settlement vs. reverse mortgage
Many seniors find that a life settlement is preferable to a reverse mortgage for the following reasons:
Simply complete a short, online form to see if you may be eligible for a life settlement, then speak with one of our life settlement experts to begin the information gathering process. Shortly thereafter (usually a matter of days once all information is received) we will get back to you with a fair offer for buying your universal life insurance policy or whole life insurance policy. In some cases, term life insurance can qualify, too.
Explore a Life Settlement Today
If you’re considering a reverse mortgage, it may be time to explore a life settlement. Complete our short eligibility form today and see if you may qualify for a life settlement through Lighthouse Life.
We’re here to answer all of your questions about life settlements. Contact us to learn how selling your universal, whole, or term life insurance policy can help you live comfortably without unnecessary risk.