Life-Insurance Lockup
Creative "investors" are offering cash and loans to help buy a large life-insurance policy -- on condition that the investor eventually becomes the beneficiary.

Creative "investors" are offering cash and loans to help buy a large life-insurance policy -- on condition that the investor eventually becomes the beneficiary. Regulators believe people who participate may be unable to obtain insurance they do need. So state insurance commissioners vow to clamp down on these deals.
But there's a catch. Rules in the works could also spoil your right to sell existing life insurance for cash. These life or viatical settlements can be useful in a pinch because you generally get more money than if you drop a policy for the insurer's cash-surrender value. The changes proposed include an excise tax on all life settlements and a lockup period that would ban you from selling a policy to a viatical company until you've had it five years. Or insurers may get to write new policies with restrictions on sales to third parties without company consent.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage, authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.
-
Quiz: How much do you know about nontaxable income
Quiz Test your knowledge of Uncle Sam's rare moments of generosity...
-
Quiz: How much do you know about Medicare?
Quiz Try your hand at our Kiplinger Medicare quiz. All the answers can be found in our Medicare articles so, if you're a regular reader, you'll have no trouble!
-
Amazon Resale: Where Amazon Prime Returns Become Your Online Bargains
Feature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Roth IRA Contribution Limits for 2025
Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute Vacation
Travel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?
insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
When Is Amazon Prime Day? Everything We Know, Plus the Best Deals on Apple, Samsung and More
Amazon Prime Amazon Prime Day is four days this year. Here are the key details you need to know, plus some of our favorite deals to shop during the sale.
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
-
Five Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.