Turn life policies into cash
A new company – Australian Life Settlements (ALS) – is offering to buy life policies from retirees that pay out at death for tens of thousands of dollars.
The company will pay up to 15% of the value of the policy so that someone over 65, whose life is insured for $500,000, could receive up to $75,000 if they signed their policy over to ALS.
But the company puts a life expectancy limit on the arrangement and will not take over a policy where the client is expected to live more than 12 years. ALS would need to pay the premiums of policies for the duration and does not want to pay them for a sustained period.
ALS managing director, Angus Sedgwick, said that many people dropped their life insurance when they retired because they believed it was no longer needed and the premiums increased over time.
“It’s offering an alternative to someone who has made the decision to discontinue their policy anyway,” Mr Sedgwick said.
