You have life insurance, but you’re realizing now maybe it’s not what you need at this time. Perhaps you like having life insurance, but your concern for funds is heavier. As you consider your options, you may want to think about getting a life settlement.
A life settlement is a way to transfer your whole life insurance policy over to a broker or provider in exchange for cash. Generally, it is for those who are above the age of 65 years. It may be possible to sell a term life policy if it’s eligible to be converted into permanent life insurance.1
Life settlements are useful for those who are older and have few people in their life who depend on them.
Before you decide to sell your policy, consider the following information:
Reducing Life Insurance Coverage
Depending on the stage of life you’re in, you may or may not feel as though you need coverage anymore. Perhaps you no longer have any family around and find it unnecessary to pay premiums when there is no one you are financially helping after your death. Consider whether you have anyone who is still dependent on you. If you have people counting on you for income, you may not want to sell your policy, as your family would no longer receive your benefit.2
Adjusting Life Insurance Premiums
It may be a trying time for finances right now. Before selling, check to see whether you can reduce your death benefit, therefore reducing your premium payments. You can also look into the loan options available with your policy. Some policies allow you to take a loan out. Talk to a local licensed insurance Agent to be sure you fully understand the options you have when it comes to financing your life insurance.2
It’s key you trust the person buying your policy. The new owner of your policy may have access to some of your personal information or may request additional information from you. You want to make sure they are a strong, financially stable company and gain a full grasp on the information they will receive about you. Talk with a licensed Agent for further knowledge on the subject.2
Just as you are looking at different aspects of your life to decide whether a life settlement makes sense for you, buyers are considering different aspects of your health and your policy when they look for potential people to buy policies from. Companies may look at your age, your state of health, the type of insurance you have, the cost of your premiums, as well as the amount they would receive from your death benefit.
Life settlements are useful for those who are older and have few people in their life who depend on them. It’s important to speak with professionals to fully understand how a life settlement may affect your process of getting new life insurance if you were to decide you still wanted or needed it in the long run.