A retained death benefit is a Life Settlement where the policyholder keeps a portion of the original death benefit. This means that even though the life insurance policy is sold, beneficiaries still receive a payout upon the policyholder’s death. It’s an appealing option for those needing immediate cash while ensuring financial support for loved ones later.
The amount retained can vary and is negotiable during the settlement process, providing flexibility based on individual needs. This retained portion offers peace of mind for those concerned about leaving their family without financial support. It balances accessing funds now and providing a future safety net.
However, opting for a retained death benefit may reduce the cash value in the settlement. A higher retained death benefit results in less immediate cash. Policyholders should carefully weigh their current financial needs against future benefits for beneficiaries.
