An Unexpected Source for Business Funding in Retirement


Do you have plans of starting a business or diversifying your investment portfolio once you hit retirement age? This might appear an unconventional approach, as investing in a startup business or other vehicles usually happen during the earlier stages of one’s career. But there are numerous older individuals who still wish to fulfill their dream of becoming their own boss and earning a substantial amount in their twilight years.

For many retirees, however, the problem isn’t about coming up with a business idea. Years of experience have probably given you enough information as to the kind of business you want to pursue. The primary challenge is accumulating enough startup capital. Everything might seem on track until you figure out that you wouldn’t be able to sustain your current standard of living when you quit your day job.

It’s alarming that individual retirement accounts fail to work as intended for the vast majority of retirees. Instead of consisting primarily of contributions, most retirement funds are rollovers from 401(k) plans. With IRAs not being enough to fund retirement activities, specialized brokerages like ALIR Settlements continue to inform clients about using their life insurance policy as a source of retirement funding.

You should remember that life insurance is categorized as personal property, which means you can put it up for sale like any property you own. This doesn’t entail surrendering your policy to your insurer in exchange for the cash surrender value. There’s a much better way of generating cash from your policy in the form of life settlements.

First, let’s discuss why you would want to sell your life insurance in the first place. As you reach retirement age, your life insurance policy may no longer be serving the purpose for which it’s intended. Your financial situation may have changed drastically compared to 40 years ago, turning your life insurance into a dormant asset.

Instead of letting the policy lapse or surrendering it to the insurer, you can sell your life insurance to those who need it. Despite being relatively unknown, there’s a robust marketplace for buying and selling life insurance.

All parties involved benefit from life settlements. The buyer receives a valuable contract and a death benefit in the future. The life insurance carrier continues to gather premiums. And you, the seller, collects an amount that reaches up to five times the cash surrender value. There’s no reason to pay for premiums if you no longer have a use for the policy, to transform it into a liquid asset to fund your business ventures, investment vehicles, and other priorities.

Life settlements aren’t new, but it’s only recently that more retirees have learned about them. In the past, many were discouraged to sell their life insurance because of the time-consuming underwriting process. But thanks to new tools and computer algorithms, a life settlement transaction can now be completed in under two months. When done correctly and according to industry regulations, life settlements can prove to be the funding source you’ve been looking for to start your new career as a retired entrepreneur.

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