There are plenty of good reasons to buy a life insurance policy, with the most common being to replace income in case of unexpected death. This is particularly important for those who have a family relying solely on their income. Of course, other reasons to purchase life insurance include helping to pay estate taxes, creating insurance trusts, or the ability to borrow against the policy in times of need.
Purchasing life insurance, especially a permanent policy, is a significant investment, and you may find that it no longer seems as valuable to you later in life. Some people decide they no longer need life insurance because they’ve outlasted their original intention. Others may find it difficult to keep paying the premiums and need a way out. Luckily, with the help of Sell My Life Insurance, it’s possible to sell your policy for its cash value. For those who have reached retirement age, or for those with severe illnesses, this can be the best choice for their futures.
Avoid Policy Lapse
Many people find it difficult to keep paying premiums on a life insurance policy after they retire or if they have unexpected expenses later in life. If premiums go unpaid for the allotted time, a policy will lapse, meaning that no death benefit will be paid to the insured. This is a total waste of what could be a valuable asset, and it’s estimated that up to 80 percent of policies lapse before payout.
While it’s true that many policies offer a grace period before the lapse occurs, it may be better to simply sell before this becomes an issue. A life settlement will remove the stressors of monthly premiums while also providing cash value that can be spent funding the rest of one’s retirement, seeking medical care, or any number of other expenses. Selling the policy is an especially good choice in situations where the insured’s dependents no longer need the benefit.
Improve Quality of Life
Another great reason to sell a life insurance policy is so that those near the end of their lives can be freed from financial burden and live out the rest of their days as comfortable as possible. Those with terminal illnesses are generally more likely to find potential buyers willing to take their policies.
While it’s true that the payout will be significantly less than what the death benefit would have been and that most brokerages will charge a commission fee, this can still be the best choice for many people. With the costs of hospice and home care constantly rising, a settlement could make all the difference in the insured’s life.
Qualifying for a Life Settlement
While selling a life insurance policy has great benefits under the right conditions, the biggest roadblock for most people is that they simply can’t find a willing buyer for their policy. Buyers will only be interested in policies if they believe they can recoup their losses, and their confidence can affect the payout.
Generally speaking, those who have a terminal illness and/or those who are over 70 years old will have the best chance of successfully selling their policies. The policy will also typically need to be valued at $100,000 or more.
After applying with a life settlement company, the seller will need to provide details about the life insurance policy as well as their medical records. If the life settlement company determines the policy is eligible for sale, they will begin the underwriting process, then present an offer. Once the sale is finalized, the seller will receive immediate cash and the life settlement company will collect the full death benefit once the insured passes and a claim is processed.
Even for those in great financial standing, there’s little sense in wasting a life insurance policy or continuing to pay for an unneeded one. Look into selling options to make the most of your policy.