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Are there any financial institutions that allow them to be assignees on term life policies?
I have a 20 year term, convertible, life policy that I am considering assigning to a bank/financial institution in order to access a portion of the face value of the policy.
The policy is one year old AND is still within the 2 year contestability period.
To my knowledge, Indiana does NOT have any rules against this type of transaction and my policy doesn’t prohibit it as long as the policy is paid and current, no matter if it’s within the 2 year contestability period or not.
I have heard that some banks/financial institutions will use them as collateral by becoming an assignee on the policy for the amount the insured has requested. I haven’t read where the insured makes any payments but it just an accelerated payment and when the policyholder passes, the bank gets their portion and the remaining amount, if any, goes to the beneficiaries.
Can anyone advise if this is still done and what institutions or investment companies still do this?
I am NOT interested in doing a life settlement and am not willing to sell my policy for pennies on the dollar and if there’s broker fees, it would be worse. The life settlement process, itself, feels predatory which is why I would rather do this type of transaction with a reputable financial institution.
The “policy auctions” they have are very strange. When I asked what information of mine is furnished to these “investors” to ensure the best offer, it was invasive, IMO. The life expectancy report is all they care about.
I am considered terminally ill and on disability so I don’t qualify for traditional loans.