7 Reasons Why To Sell A Life Insurance Policy For Cash [2020 Edition]
Who Does A Life Settlement Broker Represent? [Updated for 2020]
October 16, 2019
A life insurance policy is a valuable asset that serves very specific purposes for individuals of all ages at different times in their lives. As seniors are into their golden years the original reasons for purchasing a life insurance policy may have changed. The coverage that was once purchased for family protection or estate tax planning may now have increasing and unaffordable premiums, or the need for protection is no longer the same. With retirement and long term healthcare costs at an all time high, seniors may be asking themselves,
Should I Sell A Life Insurance Policy For Cash?
Life Settlement Definition
In the past, if you owned a life insurance policy that you no longer wanted or needed, you generally had two choices: Surrender the policy for its cash value, or allow it to lapse.
Life settlements, sometimes called senior settlements or viatical settlements, present a third option: selling your life insurance policy (or the right to receive the death benefit) to an entity other than the insurance company in exchange for cash. The sale price of the policy is more than the cash surrender value of the policy, but less than the net death benefit.
When you sell your life insurance policy, whoever buys it is acquiring a financial interest in your policy. In addition to paying you a lump sum for your policy, the buyer agrees to pay any additional premiums that might be required to support the cost of the policy for as long as you live. In exchange, the buyer will receive the death benefit when you die. Finra.org
A Life Settlement can provide financial assistance for seniors with an unneeded or unwanted life insurance policy. Selling a life insurance policy may help seniors:
• Relieve on-going premium reponsibilities
• Increase retirement income
• Pay for medical bills, long term care, and assisted living expenses
• Pay off outstanding debts, such as mortgage
Why Sell To A Life Insurance Policy
When a life insurance policy was originally purchased, it in may have been used for financial family protection, cash value accumulation to use later as a loan, or you may have had specific estate tax planning purposes.
That life insurance policy you once purchased for a specific financial reason may not be serving it’s same purpose and now it may be time to explore if a life settlement is the right solution. AgingInPlace
The 7 Reasons Why To Sell A Life Insurance Policy in 2020
• Life Insurance Coverage Is No Longer Needed
• Your Estate Tax Exemption Has Changed
• Premiums Have Increased
• Fund Your Retirement
• Fund Long Term Care, such as Assisted Living
• You Are Chronically or Terminally Ill and Need Income To Cover Medical Expenses
• Your Convertible Term Life Insurance Policy Is Coming Up For Renewal
Life Policy Solutions, a licensed life settlement broker since 1999, can help guide you through all options for selling a life insurance policy as a life settlement. We have very successful relationships with all life settlement providers, including the 10 best life settlement companies. We can be reached at 844-440-7355, or www.cashoutlifeinsurance.com.
Life Insurance Coverage is No Longer Needed
Existing life insurance coverage may no longer be needed due to the following:
• Family financial protection is no longer needed
• Children are grown and no longer need the death benefit
• Spouse has passed away
Your Estate Tax Exemption Has Changed
Your Life Insurance policy may have been originally purchased to provide funding to pay estate taxes and provide other benefits for protecting wealth. Fidelity
For 2017, the exemption increased to $5.5 million. In 2018, the exemption doubled to $11.18 million per taxpayer due to the Tax Cuts and Jobs Act of 2017. As a result, only about 2,000 estates per year in the US are currently liable for estate tax. WP
Due to the recent estate tax law exemptions, the life insurance policy that was originally purchased to protect your family and heirs from estate taxes may no longer serving it’s same purpose.
Instead of lapsing or surrendering your now unneeded life insurance policy you should consider a life settlement option
Premiums Have Increased
Your Life Insurance Premiums have increased recently and have become unaffordable.
In 2016 The Wall Street Journal‘s Leslie Scism wrote, “over the past year, several major insurers have notified tens of thousands of people of higher costs to keep their policies in force, with increases ranging from midsingle-digit percentages to more than 200%.” Scism noted that in response to these premium increases, a number of lawsuits have been filed in federal courts against life insurance companies. WSJ
Your Life Insurance premiums may have been rising and the added costs are making it difficult to maintain your daily lifestyle, it may be time to consider a life settlement
Fund Your Retirement
Retirement Can Be Expensive, selling an unneeded life insurance policy can help fund new and ongoing retirement expenses
According to the latest Bureau of Labor Statistics data, which is based on 2016 figures, “older households” — defined as those run by someone 65 and older — spend an average of $45,756 per year, or roughly $3,800 a month. That’s about $1,000 less than the monthly average spent by all U.S. households combined. USAtoday
Use the sale of your life insurance policy to fund travel, pay off debt, pay off mortgage, set money aside for emergency
Fund Long Term Care, Such As Assisted Living
Annual medical costs for a 65-year-old couple retiring today are a projected $11,752. By age 85, this amount will rise to a projected $31,966 in future dollars, according to the report by HealthView Services, a whopping 170% increase. Money
According to a National Center for Assisted Living report, the median cost for assisted living in the United States is about $4,000 per month or $48,000 annually. Over 800,000 Americans are residing in assisted living facilities, with the majority of residents being 85+ years old. These statistics go to show the importance of assisted living in the nation.
Paying for assisted living costs can seem like an overwhelming need for many people. Most people turn to assisted living once they begin to need help. It can be hard to obtain a new health insurance policy at this point to assist in covering these costs. SeniorLiving
Selling A Life Insurance Policy can help pay for new and ongoing long term care costs
Genworth offers a very user friendly and helpful Cost Of Living Survey that allows a user to enter their data to provide a general Cost Of Living for Long Term Care, based on 2018 data. This is very useful for seniors interested in learning and planning for Long Term Care. Calculate for yourself at Genworth
You are Chronically or Terminally Ill and Need To Pay For Medical Bills
Many life insurance policies have a rider attached called an Accelerated Death Benefit Rider, which is a benefit that can be attached to a life insurance policy that enables the policyholder to receive cash advances against the death benefit in the case of being diagnosed with a terminal illness. Many individuals who choose an accelerated death benefit have less than one year to live and use the money for treatments and other costs needed to stay alive.
If a life insurance policy does not have a Accelerated Death Benefit Rider and the senior is faced with a chronic or terminal illness with mounting medical bills, it may be in the individual’s best interest to consider a life settlement to generate cash now.
Chronic illness impacts some seniors’ ability to live at home and can have a profound impact on the health and quality of life of elder Americans, not to mention the financial burden that is often associated with long-term illness. ParentGiving
Convertible Term Life Insurance Policy is Coming Up for Renewal
Many people incorrectly assume that term insurance must lapse after the term. However, due to the life settlement market, term policies may have value beyond their term for a number of reasons. LISA
Term policies often times have a conversion feature that allows the policyholder to convert the term policy to a permanent policy thus making it viable for a life settlement sale.
Many policyholders avoid conversion of term because premium costs go way up becoming unaffordable, and therefore they surrender or let the policy lapse. However, if the policy is sold as a life settlement based on the conversion, the insured will no longer need to pay further premiums and will benefit from the cash proceeds from the sale. The sale of the policy can help with medical bills and help fund retirement living expenses.
A life settlement broker, or insurance agent, can help you understand if you can sell your term insurance policy for cash.
How To Sell A Life Insurance Policy
The first step to selling your life insurance is to determine if there is a value to your life insurance policy and find a qualified buyer. You can contact a life settlement provider directly, or you can contact a life settlement broker who, for a commission, can advise and guide you through the steps to sell your life insurance policy for cash.
A life settlement broker will help you navigate the buyers by promoting your policy to multiple buyers in the hopes of maximizing the value.
You Will Be Asked To Provide The Following:
• Copy of the life insurance policy
• Complete a life settlement application
• Provide medical history for the last 3-5 years, including doctor information
• Provide premium and ownership history
Once a buyer is in place, and a sale amount it agreed to by all parties, you will be asked to sign a sale contact giving ownership to the buyer in exchange for cash. Once ownership is transferred to the new owners you will receive a cash settlement and the buyer will pay on-going premiums and collect on the benefit when you die.
The life settlement process can take anywhere from 8 weeks to as much as 3 months.
Life Policy Solutions, a licensed life settlement broker since 1999, can help guide you through all options for selling a life insurance policy as a life settlement. We have very successful relationships with all life settlement providers, including the 10 best life settlement companies. We can be reached at 844-440-7355, or www.cashoutlifeinsurance.com.
To learn more about life settlements and the important questions please visit our Life Settlement Guides
“What Is A Life Settlement [Important Questions To Help You Sell Your Life Insurance Policy]
“Who Does A Life Settlement Broker Represent”
“Best 10 Life Settlement Companies”
For more help and information about Life Settlements and How To Sell A Life Insurance Policy please visit the following:
• Life Insurance Settlement Association https://www.lisa.org/
• Contact A Licensed and Qualified Life Settlement Broker to provide Guidance, Support, and Sales Assistance. Life Policy Solutions
• Visit or call your state’s Department Of Insurance
About Life Policy Solutions:
Life Policy Solutions was established in 1999 as a life settlement broker in California after recognizing the increasing needs of seniors looking to cash out their life insurance policy.
Life Policy Solutions developed highly successful strategies for presenting and ultimately selling life insurance policies as life and viatical settlements to the most trusted and well respected life settlement companies and providers.
Today, with close to $1 Billion in life settlement policy sales, and industry leading client payouts, Life Policy Solutions remains the gold standard when looking to surrender and cash out your life insurance policy for maximum cash offers.
Visit us at https://cashoutlifeinsurance.com/
