Sell Your Life Insurance

Selling Life Insurance

Instead of sinking more money into life insurance premiums, you could sell the policy and gain money for retirement with a fixed amount settlement option.

Life Insurance Policies Could Be a Cash Source for Seniors

Paying premiums for a life insurance policy makes sense when you hold a mortgage or have young children. As you move past those stages of life, your policy has the potential to become a source of retirement funds. By selling your life insurance with a single life settlement option, you could cash out a higher amount than you would by surrendering the policy to the original insurer or simply canceling it.

Who Can Sell Their Policies?

Likely candidates are 65 years of age or older and no longer need to maintain their policies. Those who will see the most benefit are policyholders who have an insurance policy of $100,000 or more.

Who Buys Life Insurance Policies?

Certain companies specialize in buying policies that appear likely to produce a return on the investment. These buyers will judge the value of your policy based on your premium amounts, the death benefits, and your life expectancy. The shorter your life expectancy, the more money you could expect to receive by choosing to  sell your  life insurance policy.

You can search out life settlement companies directly or work with a broker that will present the policy to potential buyers. The broker will then present you with a list of offers to compare and consider. In both approaches, you will need to share your health records and the details of your insurance policy.

Important Considerations

Receiving money through a single life settlement option might impose a tax bill on you. When you are thinking about accepting an offer on your policy, you should discuss the consequences with a tax accountant. In some cases, the distribution might negatively influence your eligibility for government benefits like Medicaid.

The process of selling life insurance will also involve commissions and fees. To make an informed decision, you will need clear information about these costs and how they will reduce the final amount that you receive.

Selling your policy represents a major financial decision. Under the right circumstances, it could enable a more comfortable retirement and free you of the need to keep paying premiums. You should weigh your current desire for money against your beneficiary’s need to collect the full death benefit.