Can I Sell My Life Insurance Policy?
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You can sell your life insurance.
“Americans who sold their unwanted life insurance policies, collectively received more than four times the amount they would have received had they surrendered them to their life insurance companies.”
London Business School Study, 2014
Can I sell my life insurance policy for cash?
You don’t have to wonder, “Can I sell my life insurance?”, any longer. If you have a life insurance policy you can sell it for an immediate cash payment – this transaction is formally known as a “life settlement”.
People sell their life insurance for a variety of reasons. The transaction allows them to receive an immediate cash payment and stop paying monthly premiums. At Mason Finance we aim to provide you with the details you need to decide whether selling your life insurance makes sense for you.
Am I eligible to sell my policy?
While most types of life insurance policies can be sold to a third party it only makes sense to consider selling your life insurance if the cash payout is going to be more than the cash surrender value. The most important factors are:
Age/Health: Most people that ultimately sell their policies are 65+ years old or have a serious medical condition.
Policy Type: Universal, whole, and convertible term policies are all great candidates for a life settlement.
Policy Size: The existing policy should have at least $100,000 of face value.
Should I sell my life insurance policy?
Here are some of the most common reasons that lead people to consider selling their life insurance:
You can no longer afford the premiums. Selling your life insurance is a great way to avoid letting your policy lapse if you can no longer afford the premiums. Letting your policy lapse can lead to little or no payout depending on the policy type.
You no longer need to protect against income loss. Another reason to sell your life insurance is that you no longer have a spouse or children that would be dependent on the claim in the case of your death.
Your term policy is approaching it’s expiration date. Term policies typically expire with no cash value and expensive replacement costs. You may be able to convert your policy into permanent life insurance and then sell your new policy cash.
You are looking to supplement your retirement income. Selling your life insurance policy allows you to supplement your retirement income so that you can stop penny pinching and really enjoy yourself.
You are looking to cover unexpected expenses. Finally you can sell your life insurance to help you pay for any unexpected expenses you are facing which may include medical bills or long term care.
I want to sell my life insurance policy – What’s next?
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