Should Seniors Sell Life insurance For Cash Life Settlements?

Can you sell unwanted life insurance policies for cash? Well, some people can, and this has become a popular option for older people with some policies they do not want any more.

The person or company who purchases life insurance will then be the new beneficiary so they can collect the death benefit. They also will have to pay any premiums that are still due. The old owner will get a cash settlement, and so they do not have to wait for the insured person to pass away to get paid.

This can be an attractive option for many senior citizens who need money to live on, and are not as concerned about heirs who would get a death benefit later.

This gives older people another option. Before people could just stop paying and let the policy lapse, or they could give up the poliy for a small cash value.

A better option, for people who qualify, is to find a life settlement.

Who qualifies?

The person who is actually insured must usually be at least seventy, but some investors may consider an applicant as young as fifty-five.

What Kinds of Policies Will Qualify?

In addition, the policy must be permanent. Whole or universal life insurance would qualify. A term policy may be accepted if it has guranteed option to convert it to a permanent policy.

If you have term with a convertible option, make sure you start shopping for a deal when you have time left on your policy.

Should seniors consider this?

Not everybody will want to sell their life insurance, but some people can really benefit.

This decision will keep the present heirs from collecting the death benefit. It is cash now in exchange for giving up the death benefit later.

Some companies explore this option because they want to get rid of life insurance they purchased on employees who quit or retired. They do not need to insure a key man or business owner who has moved on, and this is a way for them to get paid for the asset.

How much are these policies worth?

Policy owners will probably be able to shop a market with many people competing for the right to buy. Some can get a pretty decent percentage of the face value (death benefit). It is not impossible to find offers of 1/2 or more of the face value.

How can a person find out more?

If you think a life settlement will help you, consult a life settlement broker. These professionals can advise you, and they can help you find investors to make offers.

Nobody can tell you which decision you should make. That is up to the policy owner, insured person, and the other beneficiaries. But if this is an option for you, it is good to know about it.