Is Selling My Life Insurance Policy a Good Idea?

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

(4-minute read)

Keeping up with life insurance premiums can be burdensome and expensive. If a life insurance policy no longer makes sense for you, there is another option available that gives you the freedom to leave the payments behind and receive cash for your policy. Selling a life insurance policy helps you get the money you need now, so you no longer need to worry about your life insurance premiums. While there are several pros and cons of selling a life insurance policy, it makes sense for a lot of seniors. 

Life Settlement Advisors can help you get cash now for a policy that no longer works for you. But should you sell your life insurance policy for a settlement?

Can You Sell Your Life Insurance Policies?

Yes, you can sell your life insurance policy! A life insurance settlement allows you the opportunity to sell all or part of your insurance policy to a third-party for a lump sum of money. And as a bonus, you gain liquidity back to make a new investment or fund the next adventure. Of course, circumstances differ, and it’s possible you don’t need or want the life insurance anymore due to:

  • Unexpected financial circumstances.
  • Insurance policy is too expensive.
  • Downsizing your policy.
  • No longer needing the policy.
  • Wanting to liquidate for other reasons.

However, despite these potential situations, there are requirements that limit those looking to sell their policy. At what age can you sell your life insurance policy? In a vast majority of cases, the policyholder must be 65 or older. Another primary condition is how much the policy is worth. With a $100,000 benefit or greater, you’re more likely to be qualified based on how much will be paid out upon any death. You should consider all of these qualifications using the Life Settlement Advisors qualification calculator:

  • What is your age?
  • What is your gender?
  • How healthy are you?
  • What type of policy do you own?
  • What is the cash surrender value of your policy?
  • What are the outstanding loans against the policy?
  • What is the annual premium as a percentage of the death benefit?
  • What is the death benefit?

Selling a life insurance policy for cash gives you the freedom you need to deal with what’s important today. After you qualify, how much will you receive? 

How Much Can I Sell My Life Insurance Policy For?

The amount you receive for your life settlement depends on your death benefit, among the other factors we discussed previously. However, you will receive more than the cash surrender value by four to seven times the amount. This is due to the average life settlement value being 20% of the life insurance policy face value. That means more cash for you than what the life insurance company would buy back your policy for.

To find out more about how much you can receive for your life settlement, Life Settlement Advisors will make sure you receive the most for your policy, while being fully transparent with the process. 

Life Settlement Pros vs. Cons

You might be asking, “what are the pros and cons of a life insurance settlement?” After understanding how a life settlement works, it’s important to know what the good and bad pieces of the settlement are.

What Is the Downside of Selling Your Life Insurance Policy?

A few of the negatives to selling your life insurance policy are mostly due to life insurance settlements being a financial investment. Because they want the most of their investment, a buyer might not want to purchase your policy due to your qualifications, in particular the amount of your policy. It’s also possible you’ll be taxed for your lump sum, but most likely it will be treated as normal income up until a certain amount where it is then treated as capital gains.

What Are the Positives of Selling Your Life Insurance Policy?

A huge benefit of selling your life insurance policy is that you, as the policyholder, are no longer responsible for making premium payments. You would also receive a larger lump sum in cash than the surrender value that you can use in whatever way you see fit. This means you can pay off medical bills or increase your liquid assets, among other things. By selling your life insurance policy, you’re not in a position where your policy will lapse, giving you and your beneficiaries no returns whatsoever.

Life Settlement Advisors: Professionals You Can Trust

Overall, it is your decision whether a life settlement makes sense for you, but it provides several benefits that give you the ability to get cash now and leave the premiums behind you. If you want to sell your life insurance policy, contact Life Settlement Advisors to see if you qualify for a settlement. We will be transparent during the process to ensure you understand exactly what is happening with your policy and payment. Visit our website today for more information.

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

Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash.
Life Settlement Advisors
Leo LaGrotte
At Life Settlement Advisors, we strive to be a voice of confidence and assurance for our clients. Our goal is to educate you about the life settlement process so you can make an educated decision about whether it is right for you.