So, you have decided that you’re going to sell your life insurance policy and are now faced with the question “how to sell your life insurance policy for cash?” If yes, it is time that you know everything about the process of life settlements and what it entails. Marketing a life insurance policy is a procedure that includes selling your policy to another investor. Once sold, the buyer becomes the proprietor of the policy, which means he pays the premiums and also receives the aids from the policy when you pass away.
This process is regarded as a life insurance settlement. Life insurance settlements allow you to obtain little more money than what you would get if you had to surrender your insurance policy for its cash value. Also, life insurance settlement delivers you fewer death benefits.
Things to know before selling your policy:
Once you know the specific circumstances where you can consider selling your policy, there are a few points that you will need to keep in mind.
Here are some things that you need to know before trading your policy:
Your life insurance policy may not have the same value in the market that you want. There are probabilities that your policy might not be worth anything in the market too. Hence, you need to be aware of the consequences.
You won’t get the complete face value for your life insurance policy. There have been studies by the U.S. Government Accountability Office that proposes people only receive about 13%-23% of the total value of their policy after they sell it off, this prospect is still better than getting nothing at all.
There may be tax complications related to the sale of your policy. You may have to pay a certain amount as part of income tax.
There are also chances that your suitability for the government assistance program might change if you want to sell your life insurance policy.
Viatical settlements are dissimilar from the life settlements. People assume both are the same. The only element that’s similar in both these settlements is being able to sell off your life insurance. The significant difference between these is the viatical settlements that can only be done if a person has a life expectancy of two years or less.
Some businesses buy life insurance policies and will consult you on how to sell your life insurance policy for cash, they are known as life settlement providers who specify in purchasing these life insurance policies from individuals. These institutions are mostly regulated by state laws that make them a safe place where you can trade your policy.
You can also sell your policy by yourself; all you have to do is find a buyer or find a broker to help you out. However, this could be tricky as the buyers look for specific policies. Finding the right kind of buyer for your policy can be a hectic job. This is why we recommend that you choose a life settlement company to do the job for you.