Simple Qualifier

When To Consider Selling Your Policy

Determining if this is the right choice for you should be carefully discussed with family and financial advisors. There are certain standards that the policy and the insured must meet in order to qualify.

Life Insurance is Your Property

In 1911, the United States government ruled that life insurance policies are personal property. This outcome opened up the possibility for policies to be bought, sold, and traded, just like any other high-value asset. In times of financial hardship, a person can now choose to liquidate their policy and turn it into cash.

 

This lump sum could then be used to:

  • Pay for assisted living
  • Fund cancer treatment
  • Pay medical bills
  • Pay premiums on another existing life insurance policy
  • Fund a business
  • Pay off tax liability/debt
  • Purchase an investment
  • Fund the purchase of a lump sum income generating annuity

1. The Funds Are Needed To Cover Medical Expenses.

We will walk you through the numbers behind the numbers so you have the information you need to make an informed decision. Read more about using a payout to pay for your medical expenses.

2. The Premiums Are No Longer Affordable

Depending on the terms of the policy you own, changes in the insurance market could drive up the price of the premiums you pay. These changes can force some people to surrender their policy or let it lapse. For people who choose to get rid of their policy, a life settlement can be a more financially beneficial third option.

Some examples of why someone may no longer want to pay premiums include:

  • Financial hardship due to medical bills, legal issues, or tax issues
  • Beneficiaries refuse to pay premiums
  • Premiums have escalated due to policy performance
  • Financial hardship due to expensive assisted living costs

3. Your Lifestyle Needs Have Changed.

As the insured moves through the various stages of life, they may find that they no longer have a need for a life insurance policy. As long as they qualify, a life settlement could be a valid option.

Here some examples of lifestyle changes that could encourage a sale of a policy:

  • Divorce
  • Retirement
  • There is no longer an estate tax burden
  • The beneficiaries no longer need the proceeds