Insurance settlements are a means by which an insurance policy owner can sell his or her existing policy to a financial institution for an agreed amount for a lump sum of cash. The amount is arrived at by discounting the policy at a percentage of the policy’s net death benefit that represents the current value of the policy. When considering this trade, one has to take into account the insured’s estimated life expectancy and the associated cost of premiums to keep the policy active for that time.
A good way to arrive at a selling price is negotiation. The important fact is that the settlement amount has to be reasonable for both parties. It is a little like finding the middle ground for both the insured and policy buyer.
If you are getting this insurance settlement as a personal injury settlement, then you should consider all your expenses before agreeing to a price. The expenses to consider could include medical expenses, financial losses due to injury, and emotional trauma. Also, do not forget to calculate any longer term effects that may be caused by the injury.
The law required that all insurance companies reimburse all claims in a prompt and reasonable amount of time. However, this “prompt and reasonable time” may differ from claim to claim and insurance company to insurance company. There may be certain claims that necessitate special or extended investigation may take longer to resolve.
It would be prudent to take advice from an attorney prior to making any kind of commitment in an insurance settlement, whether it is a life insurance policy, health insurance policy, or any other insurance policy. An attorney can aid you in addressing the right questions and can give you a chance to get a fair settlement and can help with court proceedings if need be.
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Eddie Tobey