How Do I Sell My Life Insurance Policy for Cash?

(4 minute read)

Selling a life insurance policy you no longer want or need may be easier than you think—especially with the right help. Life settlements are a great way to turn an unwanted or unneeded policy into cash that you can spend in the here and now. If you’re wondering whether it is a good idea to sell your life insurance policy, we at Life Settlement Advisors want to help you. Read on to learn more as we answer questions like:

• Who buys life insurance policies?
• How do you calculate the cash value of your life insurance policy?
• What are the pros and cons of selling your life insurance policy?
• At what age can you sell your life insurance policy?

In many cases, selling a life insurance policy can be a great way to lessen financial burdens while putting more money in your pocket. Instead of being stuck with monthly premiums, a life settlement provides money that you can spend today, in the way you want. But it’s important to know which policies qualify, and if so, how much selling one will yield. In this article, we’ll help you understand the basics of life settlements. If you read this and still have questions, please reach out to us. 

Is Selling Your Life Insurance Policy a Good Idea?

There are many situations where selling your policy makes sense—namely, if you’re someone who:

• The need for the coverage no longer exists
• Has an immediate need for cash
• No longer wants to pay the policy’s monthly premiums
• Wants to downsize your policy
• Experienced a change in your health since the policy was issued

In all of these cases (as well as a few others), you may be eligible to sell all of or even part of your life insurance policy—known as a life settlement. Doing this will give you a higher payout than the cash surrender value while also relieving you from paying monthly premiums. To find out how much your policy could be worth, you can use this free life settlement calculator as a starting point. But if you’re wondering whether this decision is right for you, consider the following questions:

• Have your reasons for the policy changed—for example, the dependent no longer needs it?

• Are you looking for more ways to increase your financial freedom and cut down on expenses?

• Have you been considering surrendering your policy or simply stop paying your premiums?

• Do you have medical bills you need to pay off?

It also may help to speak with a life settlement broker about your situation. The best company to sell your life insurance policy to will be one that’s going to work for the best deal possible in your settlement. But more than that, this company should be genuinely invested in your quality of life—not just making a profit. That level of care is something we pride ourselves on at LSA. We’ve got years of experience helping seniors make the best of their golden years, using our expertise in life settlements to guide clients towards the best outcome for them. 

Can You Sell Your Life Insurance Policy if You Are Under 65?

While the ideal age for selling your policy is in your 70s, in some cases you may still be eligible sooner than 65. In extreme cases—such as a terminal illness or a rapid decline in health—a viatical settlement may be the more appropriate option. If you’re unsure about what the best route is for your policy, it’s best to talk with a trusted life settlement broker who can help you make a decision. At Life Settlement Advisors, we’d be more than happy to talk through your situation and see what’s right for you. You can also use our qualifications calculator to get a quick idea of what your policy could be worth and/or if you are eligible for selling your policy.

The Pros and Cons of Selling Your Life Insurance Policy

If you’re on the fence about selling your policy, here are some quick pros and cons to consider.

• Pros

• • Higher payout than the cash surrender value 
  • Cash you can spend in the present moment
  • Lowering or eliminating premiums

• Cons

• • Loss of the death benefit value
  • No beneficiary for the heirs
  • Potential taxes on the payout

Selling your life insurance policy for a life settlement can be a great financial decision, but it’s not right for everyone. It’s important to work with a life settlement broker that’s willing to guide you through the process and help you make the best decision for you. If that’s something you’re looking for, look no further than LSA. We’d love to help you navigate the decision of selling your policy. Feel free to reach out to us directly, or check out our educational resources to learn more about life settlements!