No, it's not government waste or corporate greed.
It is approximately the amount of money American seniors give away each year in the form of lapsed life insurance policies, according to the Life Insurance Settlement Association.
Sometimes the life insurance policy lapse is an accident. Other times, it is nothing more than an oversight. More often than not, though, the money goes to waste because the policy-holders don't know that they are sitting on the opportunity of a lifetime.
Most of the time, the insurance policies are allowed to lapse because the people who own them don't know that unneeded or pricey policies may be sold through transactions known as life settlements.
Life insurance is becoming increasingly popular in the United States, according to LIMRA, an organization that studies the life insurance industry. LIMRA's most recent Trends in Life Insurance Ownership study revealed that 5 million more households in the U.S. have life insurance than just seven years ago.
That means more families are planning for their futures--and more families may someday have the opportunity to benefit from life settlements.
A life settlement occurs when you sell your life insurance policy to a third party for an amount that is more than the policy's cash value but less than the death benefit.
You get cash, the person who buys the policy assumes all of the future premium payments and receives the death benefit at a later date.
In other words, you can essentially use the death benefit associated with your life insurance policy while you are alive. That's why some people consider life settlements to be the opportunity of a lifetime.
Investing in life settlements isn't for everyone--but they almost always make sense for the Americans who let $100 billion in life insurance policies lapse each year.
Getting something out of your life insurance policy is always better than getting nothing, especially if you find yourself in one of the following situations:
In these instances, investing in life settlements almost always make sense.
Of course, even if you meet one or more of the criteria listed above, you still might want to explore other options--and there are plenty of other options, including:
Which option is right for you and your family depends a great deal on your personal, professional, family and financial situation.
To help you determine what move makes the most sense for you, we're happy to discuss. But whatever you do, don't join the ranks of Americans who leave $100 billion unused each and every year.