The idea of letting your life insurance policy lapse indicates that you don’t need the policy anymore. In this case, you can opt is for selling your life insurance policy wherein you get the cash value more than the surrender value from the buyer and the buyer will get the death benefit after you. There is a number of reasons that you might want to sell your policy like trouble paying your premiums, you don’t have any dependent, death of spouse or divorce makes the need for the insurance policy worthless.
The thought that why should someone get your death benefit but what important is that you have money when you need it the most whatsoever might be the reason. Selling insurance policy (https://plsettlements.com/) can be a wiser decision if taken well in time. Since selling the life insurance policy is not all that easy due to the involvement of legal and financial transactions that can be complicated for a normal person. The best thing is to consult the life settlement provider since they are licensed and experts in the insurance field they can guide you and help to get you the highest possible settlement for your policy.
The value of the insurance policy depends on the age of the insurer, gender and health status. After considering other factors like the type of the policy etc. settlement payout is evaluated. However, there is some eligibility criteria’s that are supposed to be met mentioned here under:
- The type of policy must come under in our Life and term period.
- Age of the policyholder to be 65 years or more.
- The face value of the insurance policy should be at least $100,000
- To be eligible, life insurance policies must be at least 2 years old
- As mentioned earlier gender and health status
- A person having terminal illness and age less than 65
Point to take care when considering life settlements
- Since the policy is your asset and you sell it like other assets, but when you receive cash for your policy tax implications will arise, so it is important to consult your financial advisor who can guide you on this front.
- The amount of premiums that you have paid so far is tax-free
- The money from a life settlement may be taxed as income or capital gains.
- You also need to take care that selling your policy will change your financial status.
- Don’t accept the very first offer, wait for the right offer
- Don’t expect the face value of the policy; the cash value will always be less than the death benefit, though the cash value depends on the amount of the premiums, type of the policy, life expectancy, age, gender, death benefit, health condition, etc.
- You can try finding life settlement companies that are licensed at the state level and probably can sell your policy yet help you get a share of the death benefit.
- The entire process takes a few weeks to a few months
How does selling your life insurance policy works?
- You need to share the details of your life insurance policy, along with health and medical records with a life settlement provider.
- The settlement company will calculate your life expectancy based on your medical records.
- If you receive an offer, you can sell your policy.
- Once the ownership is transferred to the buyer, he/she will start paying future premiums of your policy. It’s even possible that the buyer further resells the policy to someone else who will pay the future premiums.
- You will have to be in contact with the buyer to confirm you are still alive. For example, the buyer might occasionally send you a letter that requires you to sign and send it back.
- After you die, the buyer will receive all the death benefits.
The benefit of life settlement
- The biggest benefit is that you amount more than surrender value if you were “cashing out” with the issuing insurance company, selling the policy to an investor yields you more money.
- You can use the money as you want it might be paying off debt, funding a long-term health care requirement, education, marriage or long-awaited vacation. The choice is entirely yours.
Enables you to expand your monthly budget, since you are not liable to pay for premiums now.