If you are considering a life settlement, you’d probably like to understand how much money your life insurance policy may be worth. The formulas for determining the amount of a life settlement are complicated, and much depends on ever-changing factors like the interest rate climate and which companies want to purchase your policy.
Your life insurance policy is a personal financial asset that could provide you with a source of much-needed funds. Since you own your policy, you have the legal right to sell it.
Your life insurance is a financial asset that belongs to you just like your real estate, personal property, retirement accounts, and bank accounts. Like your other financial assets, it can be sold to another party.
In a life settlement, the investor agrees to pay the policyholder a fee. They become the beneficiary of the policy, and when the insured person dies, the investor receives the face value of the policy.
Selling your life insurance policy is an effective way to receive a lump sum of money and eliminate an expensive premium payment from the budget for many seniors. If your policy no longer fits your situation, you can gain access to cash by selling your life insurance to institutional investors.