The Basics
When you buy life insurance, you want coverage that fits your needs and your budget. The best way to get it started is to,
- First, decide how much you need, for how long, and what you can afford.
- Then, examine what kinds of policies are available to meet your needs and pick the one that best suits you and,
- Finally, compare what different companies charge for the same kind of policy and the amount of insurance you want.
It makes good sense to ask a life insurance agent to help you select a policy that best meets your needs and resources. An agent can review your insurance needs and provide information about the kinds of policies that are available. If one kind doesn’t fit your needs, ask about others.
Learn More About Viatical Settlements
Also called “life settlements" in this type of agreement a life insurance policyholder sells their life insurance policy to a third party for an upfront cash payment that is less than the full amount of the death benefit. The provider continues to pay the policy premiums and upon the policyholder’s death, cashes in on the policy for its full amount.
We've complied tools to help you find Viatical Settlement Provider near you, verify the status of their license and feel confident moving forward.
Life Insurance Policy Locator
If you think a loved one who has passed had a life insurance policy on which you may be named as a beneficiary, but you don’t have the policy, we may be able to help.
The NAIC has developed a life policy finder service which asks life insurance companies to search their records to see if an individual had a policy with the company.
Look Out for Stranger Originated Life Insurance (STOLI)
STOLI arrangements are not traditional life insurance transactions. They are investment schemes created by investors (i.e., strangers) who have no relationship with the consumer. Instead, a consumer is advised to purchase a life insurance policy, and the investor will pay the premiums as well as an incentive or inducement of some type to the consumer. Then, the investor will get all or a percentage of the death benefits payable under that policy when the consumer dies.
Consumers should be aware that STOLI arrangements vary and could go by a number of different names, including:
- Zero premium life insurance;
- Estate maximization plans;
- No cost to the insured plans;
- New issue life settlements; or
- High net worth settlements.
We DO NOT sanction or approve STOLI arrangements. These transactions and the parties involved in these transactions may be in violation of Pennsylvania’s existing insurance laws and despite the benefits offered to consumers there are negative “costs” to consumers, such as:
- Unanticipated tax liabilities
- Ineligibility for government entitlements and programs
- Higher life insurance premiums for additional life insurance
- The inability to purchase additional life insurance
Need More Help?
For more help or to get answers to your insurance-related questions, our Consumer Services Bureau can help! Visit our Need Help page.