Selling Life Insurance Policy
Instead of letting a life insurance policy lapse, it may be easier to sell it for cash. Learn more about how the process works with a single life settlement option.
A Guide to Selling a Life Insurance Policy
Having a life insurance policy is important for many people because it helps families cover expenses after the death of a loved one. However, there may come a time when you can no longer afford to pay the premium or simply don’t want or need the coverage anymore. Instead of paying for something that you don’t want or need, it could be possible to liquidate it.
Who Can Sell a Life Insurance Policy?
As a general rule, you must be 65 or older to sell your policy. However, exceptions can be made for those who have a terminal illness or in the event that a life insurance purchaser feels like a deal is worthwhile. While policies of any amount can be sold, those that have a value of $100,000 or more tend to sell the fastest.
What Types of Policies Can Be Sold?
Most brokers or insurance providers who buy policies prefer to purchase universal or whole-life policies. However, it is possible to find a buyer for a term-life policy or other types of policies that only provide coverage for a defined period of time. Typically, whoever acquires the policy is mostly concerned about getting more in benefits than what they will pay out while you are still alive.
What You Should Consider When Selling a Life Insurance Policy?
When you choose to sell a life insurance policy, it is important to know that the proceeds received from the sale could be taxable. However, any death benefit that is passed on to your beneficiaries is given to them tax-free. It is also important to consider that fees and commissions could reduce the amount that you get from the sale of the policy.
Selling a life insurance policy can be an effective way to make money in a short period of time. It may be possible to use that money to finance your retirement, take care of your children or create a liquid savings account. Whether you are interested in selling now or sometime in the future, it is always a good idea to know what your options are with a fixed amount settlement option.