How to Sell life Insurance Policy
In life we deal with many situations and circumstances, there come many phases under which you might have to sell your life insurance policy, though life insurance policy is purchased to ensure the family protection in case of the death. You might be in:
- Dire need of cash
- Can’t afford the premiums each year
- Your term policy is about to expire
- You need to cover medical expenses
- Looking to boost your retirement income
In such cases, you have the flexibility to sell your life insurance policy.
The process of selling life insurance is known as life settlement which a bit complicated procedure for the common man as it involves solicitation, negotiations and many financial and legal formalities to be taken care of and all of the above is the evaluation of the right price for sale. Once the policy is sold you get the
The amount that is more than cash surrender value, but less than its net death benefit, further the new policyholder/buyer will take over the payment of the premiums and take the policy benefits. The policy can be sold to a buyer or a licensed life settlement provider. Life settlement providers serve as a buyer and are experienced in buying policies; they are experts at analyzing and evaluating big face-amount policies.
Also Read: Know before Purchasing Life Insurance
In case someone who wants to sell the policy doesn’t suffer from any serious or chronic illness, it is called a life settlement. If the policyholder who is suffering from a serious and chronic illness wants to sell a policy, then it’s called a viatical settlement.
To sell a policy it is important to meet these criteria
- Your age is 70 years or more.
- The minimum face value amount of life insurance policy to be $100,000.00.
- The age of policy for more than 2 years.
Factors that influence the sale price of your insurance policy
- The rating of the insurance carrier matters a lot and can affect the cash value of the policy. The better the rating, the better the returns, so always buy the policy from a top-rated Insurance company.
- Life Settlement companies will check if any outstanding loans are pending against the policy
- If the type of policy is any of these: Universal Life Policy, Whole Life Policy, Term Policy, Convertible Term Policy, Joint Policy, and Second-to-Die life insurance policy then you can expect the quick sale of the policy.
- The minimum age of the policy.
- Another very important factor is how many premiums are required to keep the policy in force. This determines how much value you will get if you sell your life insurance policy.
Like you can sell your car similarly you can sell your life insurance policy but the only difference is that you can sell your car by yourself but you can’t sell life insurance policy by yourself since it involves complex legal and financial transactions and compliance with latest rules and regulations.
Usually, people who can’t find a trusted buyer, the best way to sell your life insurance policy is selling it to life settlement companies like Prosperity Life Settlements or sell the policy through a broker to third part.
Look deeper when it comes to life settlements by yourself
- It is important to have an in-depth understanding of policy rules and regulations regarding its sale and state laws that legalizes the process.
- Study and analyze all the offers that come to you, take your time to choose the best offer. And if still you feel doubtful then better consult life insurance settlement experts.
- Since there are some taxes involved it’s better to consult an accountant to know tax implications.
- If you are in heavy debts talk to your financial advisor before you sell a life insurance policy.
Also Read: Different Types of Personal Insurance
In spite of dwelling your head deep into all this, it’s wise to consult experts who can guide you in making the best decision and can get you the maximum value for your policy. Only 2/10 are aware of the fact that you can sell your life insurance policy and selling the policy is not a cup of tea for the two who are aware. Prosperity Life Settlements guides and enlighten clients to make a better decision by providing them full information. Professional life settlement brokerage help is completely needed and advisable for fulfilling regulatory requirements and maximizing your settlement amount.
In hard-press financial conditions, people scramble for cash to meet daily expenditure and maintain current lifestyle demands. Your life insurance policy can be a possible source, but should go for it?
There are some problems in using life insurance to meet immediate cash requirements, specifically if you’re compromising your long-term goals or your family’s financial future. You can think of the following option might be of some help:-
- Surrendering policy means surrendering the benefits directly to the company and the value will be according to the insurance company policy which will include some penalties for early withdrawal of cash from a policy.
- Selling your policy
- Withdraw cash value below the amount you have paid in policy without penalties and taxes
- Borrow against cash value by taking a loan from a bank or Life Insurance Company, this option is quick and easy.
- Borrowing cash against death benefit as collateral
- Get accelerated death benefit if you fighting with some serious health illness like cancer, you can get a portion of the face value of the policy by showing them your medical reports.
Life insurance is surely going to benefit your loved once but will helpful in need of the hour. Choosing the best way to sell a life insurance policy can be challenging so consult an experienced advisor so that you can get maximum return. A seasoned professional can get a higher value life settlement value for your life insurance policy.