Selling Your Life Insurance
Selling your life insurance policy could save you from expensive premiums and lapsing. You should first learn what to do before taking this action.
Things You Need to Know Before Selling Your Life Insurance Policy
There are a number of reasons why a senior may choose to sell their insurance policy to a life insurance broker. Some of these reasons include qualifying for Medicaid, planning for retirement, or just no longer needing a policy. A very common cause is that life insurance premiums are becoming too expensive to pay for with a limited budget.
What Happens When Premiums Can’t Be Paid
A premium can get so expensive that you won’t be able to afford to pay them anymore. When a premium is not paid, the insurance provider could stop providing you with coverage. They might even take away your death benefit. If you know that you can’t pay your premiums, then you could sell your policy before this happens by taking advantage of fixed amount settlement option.
The Types of Life Insurance Policies That Qualify for Being Sold
You must first learn what kind of life insurance policy you have. The types that can be sold are term, universal, and whole life insurance policies. If you are unsure, then check with your financial advisor or policyholder. Once you know you qualify, you can sell your life insurance policy.
How a Life Settlement Is Done
When you sell your life insurance policy to a broker, you’re receiving more money than the cash surrender value of the policy. At the same time, it’s less than the total death benefit. The death benefit is then owned by the broker. You could talk with your financial advisor about making a split decision. You may not have to give up the entire value of the death benefit if you want to save some for your children. Understand that eligibility may vary, especially if you’ve had that policy for years.
In addition to helping you gain more money right now, a life settlement can prevent you from losing coverage and your whole death benefit. You could save yourself from spending too much on premiums, provided you have the right kind of policy. If you want to sell your insurance policy, then be sure to contact your financial advisor or a life insurance settlement company so they can set you on the right track.