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. 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.
. The process is called a life settlement. It’s well-regulated and as the industry grows, so does the average policy owner’s access to information about how to turn an unwanted life insurance policy into cash. . With a life settlement, you are in control of how you use your life insurance policy. If you no longer need to provide for the financial well-being of dependents, but you would like to add to your retirement savings or use the money to pay for rising healthcare costs, selling your life insurance policy could be the answer. Of course, you can do anything you want with the money you receive from a life settlement. . The first thing you must do is find out if the type and size of your life insurance policy are eligible for a life settlement. Investors look for certain types of policies. Typically, a permanent life insurance policy insuring a person who is over the age of 65, with a face value of more than $100,000 qualifies. . Some term life insurance policies and smaller policies may also qualify for a life settlement. It’s easy and free to get an estimate of what your life insurance policy may be worth, should you decide to sell it. . People who are terminally ill, with a life expectancy of fewer than two years, may also decide to sell their life insurance policy for cash. This process is called a viatical settlement. . Selling your life insurance policy with the help of a broker You can sell your life insurance company to an investor yourself, or you can enlist the help of a licensed broker. A broker will communicate with different investors on your behalf. Their goal is to get you the most money for your policy. The majority of life settlements involve a broker. If you decide to use a broker, they’ll take a percentage of the sale of the policy as commission. . Some policy owners prefer to bypass the broker and deal with the investor on their own. This means they won’t have to pay the broker’s fees, but they also won’t get multiple offers for their policy. Some people who want to sell their life insurance policies choose to use a broker because they want someone who understands the industry to work on their behalf. . The broker or provider will need details about your life insurance policy. You’ll also give them access to your medical records, so underwriters can determine your life expectancy. Throughout this process, state and federal laws protect your personal information and identity. The process should be transparent, so it’s important that you discuss any concerns you have with the broker or provider. . If you decide to use a broker, they will contact providers on your behalf to gauge interest in the policy. When they get an offer that they feel is a good representation of the policy’s value, they’ll contact you with the information. . When you decide to sell your life insurance policy Before you choose to sign your policy over to the provider, it’s important to consult your CPA or a tax professional. In most cases, proceeds from a life settlement aren’t subject to income tax, but since everyone’s situation is different. . If you agree to the settlement amount, the policy buyer will start the closing process. You’ll receive a packet of documents to review and sign. Among the paperwork, you’ll find a Transfer of Policy Ownership and an Agreement of Sale. . When the policy buyer receives the completed paperwork, they’ll fund an escrow account with the amount of money you agreed to receive in exchange for your life insurance policy. You’ll be able to verify that the money is in the escrow account. . The policy buyer will submit the signed paperwork to your insurance company, so they can become the policy’s beneficiary. They will also take over premium payments. . An escrow agent will verify that all terms of the agreement have been met. They’ll transfer the money in the escrow account to you, and you’ll no longer be responsible for paying premiums on the policy. . After you receive money for your life insurance policy Even after you receive the funds, you have a rescission period mandated by insurance regulation. So, if you change your mind after the process is complete within that time period, you can return the money and regain ownership of (as well as responsibility for) your life insurance policy. The rescission period varies according to your state of residence. Your life settlement broker or the investor can offer you details about the timeline of the life settlement process, including the rescission period. . After your life settlement is complete, you have received the money, and your rescission period has passed, the sale is irrevocable. The provider that purchased your life insurance policy may make contact with you occasionally so they can update your life status and adjust their projections for their investors. They may also data tracking methods to receive alerts when you die so they can file a claim with the insurance company. . Investors usually buy groups of life insurance policies, so no one person experiences significant financial gains as a result of another’s death. If you decide to sell your life insurance policy through the life settlement process, either with a broker or on your own, your personal information is protected by federal and state privacy laws. . Remember, when you have questions throughout the life settlement process, your broker is there to help. Your life insurance policy is a valuable financial asset and should be treated as such. When the policy no longer meets your needs, it’s within your legal rights to sell it for a lump sum of money. . After you receive the funds for your life insurance policy, you can do what you choose with the money.
5 Comments
5/17/2018 11:42:14 pm
I never thought that life insurance owners can sell their insurance policy. I appreciate you for helping me understand that it can happen if the policy is not applicable to one's situation anymore and that it can be sold to gain cash instead. If I remember right, my best friend's grandmother will be selling her life insurance. His grandmother really doesn't need much because she is a healthy old woman. My friend told me that she rarely takes medicine and only eats healthy food ever since. That is why his grandmother thinks that she doesn't need it anymore.
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Henrique Velutini
9/6/2022 12:37:48 pm
I need to know how much do broker get from the sell, could some call or send email, [email protected], the reason I have a person over 63 years that desires to sell her life policy for 1.000.000 USdolares.
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12/24/2019 12:12:37 pm
Im selling my $313K life policy due to high premium. and I would like to do it ASAP
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10/6/2022 08:40:02 pm
Rise treatment Mr. Boy church everyone onto.
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