( 3 minute read)
In most cases, selling a life insurance policy for a life settlement requires a minimum death benefit of $100,000. Unfortunately, you usually can’t sell a life insurance policy below that value—but don’t give up just yet. At Life Settlement Advisors, we have a wealth of experience in helping policyholders find the best solution for their situation, sometimes selling all of or even part of their policy. While selling your policy may not be an option, there may be other ways to ease your financial burden—and our life settlement brokers are more than happy to help you through that process. We also have many educational resources for policyholders to help answer frequently asked questions such as:
- How much can you sell your life insurance policy for?
- What company will buy your life insurance policy?
- At what age can you sell your life insurance policy?
Keep reading for more about life settlements, which policies may qualify for one, and what kind of service you should expect from the best life settlement companies. You can also reach out to us directly with any questions about your unique circumstances.
How Long Do You Have To Have a Life Insurance Policy Before You Can Sell It?
The minimum amount of time depends on the policy type, the circumstances of the policyholder, and state regulations. Most common policy types, such as whole life insurance and convertible term life insurance, will need to be held at least 2-5 years before selling—but again, this may differ state to state. The best way to be sure is to speak with a life settlement broker. For a quick idea of your eligibility and how much of a payout you can expect, use this life settlement qualifications calculator as a starting point.
How Much Money Do You Get When You Sell Your Life Insurance Policy?
Generally, you can expect around 20% of the policy’s death benefit when you sell it for a life settlement; according to Forbes, that’s around 4 to 11 times higher than what you’d get from the surrender value. But the specific amount will vary based on a number of factors, including:
- Policyholder’s age
- Size of the death benefit
- Monthly premium amount
- The policy’s issuer
- Health of the policyholder
- The buyer’s risk assessment
- The life expectancy of the insured
All these variables impact the final amount, so it’s somewhat tough to know exactly how much to expect. But you can get a rough estimate of what you’ll likely get by using this qualifications calculator. Ultimately, your payout will also depend on who you sell your policy to and what sort of deal you’re able to work out with them.
Like many other assets, selling life insurance policies isn’t a cut-and-dry process. It can be pretty challenging to navigate for anyone, but especially someone who doesn’t know where to go or how to negotiate with buyers. The process is complicated enough and there are brokers who specifically work with life settlements—like we do at Life Settlement Advisors. People interested in selling their policy will have a much easier time working with a broker, and at LSA we have decades of experience in the industry to help guide our clients to the right choice for them.
At LSA, we don’t just have the experience and knowledge you need to get the best payout; we also truly care about the people we work for. We want to help seniors enjoy their golden years and/or retirement with as much financial freedom as possible. Selling a policy or even part of a policy can be a great way to unburden your finances and spend more time doing the things you love, with the people you love.
Is Selling Your Life Insurance Policy a Good Idea?
If you’re over 65, experienced a change in health since the policy was issued, no longer need your policy, or simply want to get rid of your monthly premiums, you should consider selling your policy for a life settlement. At Life Settlement Advisors, we have 24+ years of experience helping clients navigate this process and find the best deal for their situation. It’s possible to sell your policy—or even part of your policy—for a cash value that’s higher than the surrender value, so you can have more money in your pocket today.
For more information about life settlements and how they work, please check out our FAQs page or our qualifications calculator to see if selling your policy is right for you. Also feel free to contact us directly through our website with any questions you may have. We’re looking forward to meeting you and working with you.
