Is It Worth Selling Your Life Insurance Policy?

Did you know you can sell all or a portion of a life insurance policy, even term insurance?

 (4 minute read)

Life insurance policies can have generational benefits for your family once you’re gone. They can provide funding for your childrens’ or grandchildrens’ education and serve as a financial cushion in times of crisis. If you’ve seen commercials or have overheard your family and friends talking about life insurance policies, it’s likely that you’ve asked yourself, “Is selling a life insurance policy a pyramid scheme?” Well, the answer is no.

 Having a life insurance policy works twofold. On the one side, there is a death benefit for your beneficiaries. On the other side, there is a cash value when you choose to sell your life insurance policy. If you choose to keep your policy, you’d be saving it for your beneficiaries to use however they need it. Alternatively, selling your policy could mean establishing a 529 College Savings Plan for your children or grandchildren, or you could purchase an affordable long-term care option. Whichever route you choose, if you’re wondering, “Is selling your life insurance policy a good idea?,” here are some ideas to consider when weighing the pros and cons of selling a life insurance policy.

Commissions

When you sell your policy, you must remember that sometimes the commission fees can deduct up to 30 percent of your settlement. So if your settlement is worth $150,000 and commission fees are 30 percent, you’re only getting $105,000. The good thing is that you’ll still have more money than you would if you decided to surrender your policy.

Financial Dependency

If you are the primary provider of your family, and others depend on you, your family won’t be able to take advantage of the safety and death benefit that a life insurance policy provides. In this case, the best advantage is to leave the financial cushion of a death benefit for your family to jumpstart or provide the continuity of wealth.

Public Assistance

Receiving a life settlement can affect the government aid that you may receive. This is because a settlement increases your income bracket. This increase in income could possibly make you ineligible for Medicaid, SSI, Section 8, or SNAP benefits. Before choosing to receive a life settlement, make sure that you check the income limits so you stay within reasonable limits.

Questions to ask before selling your policy

With any serious task, it’s important to know exactly how it works. In terms of selling your life insurance policy, here are some questions that could help you determine the best option. 

    • Do you need the policy coverage?
    • Can you trust the life settlement provider?
    • Will your family survive if you take a settlement?

We know that it’s tough to make these decisions, but this is why Life Settlement Advisors is here to earnestly help you determine the best financial options for your life insurance policy. We help make evaluating life settlements a breeze and make it our primary focus to bring seniors with unwanted life insurance policies a better option to recoup their investment. The bottom line is this: your life insurance policy is an asset that can help you in the right circumstances. Together, we can make the most of it.

Did you know you can sell all or a portion of a life insurance policy, even term insurance? Selling an unwanted life insurance policy is no different than selling your car, home or any other valuable asset that will create immediate cash. Contact us today to learn more. 

Leo LaGrotte
Life Settlement Advisors
llagrotte@lsa-llc.com
1-888-849-0887

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