If you’re reading this, you’ve likely made the decision to sell your life insurance policy. Selling your policy for a life settlement will both eliminate monthly premiums and give you a higher payout than surrendering the policy. Both of these benefits will mean less financial stress on you and more money to spend. The first step, though, is knowing how and where to sell a life insurance policy. Finding a buyer can feel challenging or even overwhelming, but thankfully there are life settlement companies with advisors who are eager to help you.
At Life Settlement Advisors, we love helping our clients unburden themselves from unwanted or unneeded policies, giving them the freedom and extra income they need to enjoy the best years of their best lives. One of the ways we do this is by helping our clients find the best companies that buy life insurance policies, and securing the best deal possible. To show you a little more about that process, let’s look at some of potential buyers for your policy and how to ensure you get a good payout.
Who Buys Life Insurance Policies?
Generally, life insurance providers buy policies. A life insurance provider is a company that seeks out policies to purchase, paying the policyholder a lump sum of cash as well as handling the policy’s monthly premiums. The life insurance provider will continue paying the premiums until they can eventually collect the death benefit.
If a policyholder is interested in selling their policy for a life settlement, it is best to seek the help of a life settlement broker, also known as an advisor. These brokers help policyholders find attractive offers and ultimately secure a sale.
How Much Can I Sell My Life Insurance Policy For?
The exact amount depends on your policy, but in every case, selling a life insurance policy will almost always yield a larger amount than the cash surrender value—and by far. On average, a life insurance policy will sell for about 20% of its value, which is significantly higher than the average cash surrender value of less than 0.5%. That number can also be higher, depending on specific qualifications (which we’ll discuss in the following section).
When Should You Sell Your Life Insurance?
There are several cases where selling a life insurance policy is a smart idea. Perhaps you…
- No longer need the life insurance policy
- Want more financial freedom and fewer bills
- Had a recent emergency and need money ASAP
- Want more money to spend here and now
If any or all of these sound familiar to you, it’s maybe time to consider selling your policy for a life settlement. There’s no need to continue paying for something that’s not providing you benefits anymore—especially when you could be spending that money right now on the things you actually want or need.
Keep in mind that there are minimum requirements to sell your policy, including:
- Owning a policy type that can be sold (universal, whole life, convertible term, or survivorship).
- Have a policy size of $100,000 or greater.
- Experiencing a change of health since purchasing the policy.
- Have owned your policy for more than 2 years.
- Meet minimum age requirements.
If you’re curious about whether your policy qualifies for a life settlement, LSA has a “Sell My Life Insurance Policy” calculator that you can view here.
At What Age Can You Sell Your Life Insurance Policy?
You must be at least 65 years old to sell your policy. There are very rare exceptions, but in almost every case, providers will only buy from policyholders that are at least 65. If you’re unsure whether your specific circumstance may still qualify, please reach out to us at LSA and we’d be happy to help.
Is It Worth It To Sell Your Life Insurance Policy?
For many people, it absolutely is! If you don’t need your policy or simply no longer want to pay for it, selling the policy for a life settlement is a much better option than lapsing or surrendering it. Not only that, but a life settlement will give you a much higher payout than your surrender value, meaning you’ll not only eliminate monthly premiums but also have additional money to spend how you want.
Life Settlement Advisors is a great place to start the process of selling your life insurance policy, and we’re more than happy to help you. Please visit our FAQ page if you have any more questions about how selling your policy works, or reach out to us directly with any questions.