One lesser-known way to pay for senior care is by selling your life insurance. In a “life settlement,” a company buys your policy, pays the premiums, and collects the death benefits. Yes, it can be seen as morbid. But one type of life settlement is downright wrong, some states have determined. According to The Best Life, a blog from U.S. News & World Report:
More recently, the image of life settlements was hurt by its association with what came to be called “stranger originated life insurance,” or STOLI for short. In STOLI transactions, brokers often aggressively hustled older seniors into agreeing, for a fee, to have insurance on their lives purchased by third parties, who would pay the premiums and collect the death benefits.
“Many states have adopted new rules to sharply limit if not end STOLI,” the post says. The settlements may also have unanticipated financial consequences, “including income tax obligations and the loss of public benefits due to the extra income from their STOLI fees.”
Read more here: “Should You Sell Your Life Insurance Policy?” Toward the end, an expert offers advice about selling your life insurance the traditional way. (Look for the bulleted list.)
For more ideas on paying for senior care, check out these previous OurParents posts.
Leigh Ann Otte is a freelance writer who covers finding and paying for senior care for OurParents. If you have any questions about this post or need help finding senior-care options for a loved one, call 1-866-483-4896 to speak with a care advisor in your area.