Are You Thinking About Selling Your Life Insurance Policy?
If you are thinking about selling your life insurance policy, get the information you need upfront in order to make an informed decision about selling your life insurance policy.
If you are thinking about selling your life insurance policy, a life settlement or a viatical is what you are considering.
What is a Life Settlement
A life settlement is the sale of your life insurance policy to a third party who will pay you a lump sum of cash upfront. In exchange for paying you cash for your life insurance policy, the third party becomes the owner and beneficiary of your life insurance policy. When you die, the third party will receive the life insurance proceeds from your life insurance policy.
What is a Viatical
A viatical is also the sale of your life insurance policy. The difference between a life settlement and a viatical has to do with your health and life expectancy. Generally speaking, a life settlement is for people with life expectancies greater than 24 months, while a viatical is for people with terminal illnesses or life expectancies less than 24 months.
Do You Really Want to Sell Your Life Insurance Policy?
Only you can decide if a life settlement is right for you. Some common reasons why people sell their life insurance policies are:
- Money – This economy is killing everyone. You may be able to obtain a substantial amount of cash by selling your life insurance policy.
- Need – Your needs may have changed since you purchased your life insurance policy. If you don’t need life insurance, why pay for it?
- Retirement – If you own a business, do you have a key person life insurance policy or buy-sell agreement in place? Some business owners are able to sell their life insurance policies when they retire.
- Long Term Care and Nursing Home Expenses – If you are looking for assets to cover the cost of long term care and nursing home expenses, selling your life insurance policy may provide a better option for you than canceling your policy for its cash surrender value.
- Estate Changes – Estate planning changes all the time. You may no longer need as much life insurance. Maybe you can sell some of your life insurance for a lump sum of cash?
- New Life Insurance – You may be able to buy a new life insurance policy for less than you currently pay, allowing you to sell your existing life insurance policy.
- Life Insurance Surrender – If you own a universal life insurance policy or whole life insurance policy, you may be able to sell the life insurance policy for more than the cash surrender value of the life insurance policy.
- Term Life Insurance – When a term life insurance policy reaches the end of the term period, most people simply cancel the term life insurance policy. You may be able to sell this term life insurance policy instead.
Life Settlement Overview
Life Settlement Industry – There are a number of different types of life settlement companies involved in the sale of your life insurance policy. Life Settlement providers, life settlement brokers, life expectancy companies, life settlement investors, life insurance agents, etc.
Find out how each one of these professionals play a role in the sale of your life insurance policy so that you are better informed.
Life Settlement Brokers – You may have first learned about a life insurance settlement from your life insurance agent. If you are going to consider selling your life insurance policy, your life insurance agent should take your life insurance policy information to a life settlement broker. The life settlement broker is responsible for shopping your life insurance policy out to the funding sources who may buy your life insurance policy.