Recently I read a short blurb in the paper about some scam artist passing off STOLI plans as life settlements. I thought I’d take a moment to go over the difference, because it’s pretty big.

Day and night actually.

STOLI, or Stranger Oriented Life Insurance is where a company or consultant sets up a new life insurance policy, usually for seniors, with the beneficiary being a total stranger. A private investor or group hoping to cash in on a quick death. What most of these people are doing is actually giving the come on to seniors deep in debt, offering them a financial solution via a new life insurance policy.

Not so with a life settlement. A life settlement is for your existing life insurance policy and for people that no longer need that policy, for whatever reason. Life settlements are legit and do offer financial freedom to many seniors no longer wanting or needing their existing life insurance policy.

Policies already in place.

Do you see the difference? If you have a plan that you and your family no longer need, a life settlement might give you a financial boost. But you’ll need to go over the facts with a real life settlement expert.

Get the facts, get informed.

It is tough sometimes when it comes to considering large changes that effect your future. Especially in all things financial. Your bread and butter, the things you have worked all your life for.

So what are some of the factors involved for people considering a life settlement?

Below are a few of the more common reasons people opt to sell their insurance policy and choose a life settlement.

1. The life insurance policy is no longer needed or wanted

2. Premium payments have become unaffordable

3. Thoughts of surrendering the policy

4. Policy is about to lapse

5. Change in financial circumstances

6. Change in life situations (for example, divorce or death)

Just to name a few. There are actually hundreds, if not thousands of reasons for selling your life insurance policy. Your situation may fit into one of the categories above, it may not. But ultimately the best thing you can do is sit down with a life settlement consultant. Learn about the options and the procedure. Find out if it’s the right thing for you.

To those in the know about life settlements, this is going to be remedial info.  But for those of you who don’t know, and the number is large, it’s a fact.  Your life insurance policy may hold more than just it’s face value cash redemption value.  In fact, many financial experts now agree that it should be the responsibility of all financial advisors to inform their clients about life settlements.

But is a life settlement right for you?  Maybe, and maybe not.  No one but you can decide this.  But in order to do so, senior citizens need to learn about the process.  You need to find out everything possible in order to make the decision that suits you and your family.

The best thing to do is consult a life settlement advisor and get the skinny. You’ll want to make an appointment and talk everything over with him or her before making any decision.

There is no blanket “right” or “wrong”…. Only what is best for you and your family’s future. Get the facts, you’ll be glad you did.