Find out about different life insurance settlement options for selling a life insurance policy and how to decide which option is the right choice for your finances.
Understanding the Different Life Insurance Settlement Options
Life insurance is designed to pay out cash to your beneficiaries after your passing. You may have recently taken a look at your finances and realized that your situation is different than what it was when you purchased the policy. These tips will help you understand the different life insurance settlement options and how they could be of benefit to you and your family.
Selling Part of Your Life Insurance Coverage
One option for life insurance settlements is to sell a part of your coverage. For example, you might have $1 million in life insurance. Perhaps your kids are grown, your mortgage is paid off and you’ve saved a pretty penny for retirement. Selling off $750,000 of the life insurance policy could eliminate your premiums and give you cash to take a vacation or improve your monthly cash flow.
Selling Your Entire Life Insurance Policy
The second settlement option is to sell all of your life insurance coverage. If your retirement is fully funded, this could be the option for you. Settling the full amount of your life insurance policy may also be the wise decision to make if you have cash-flow issues. For example, if your property taxes, medications and health insurance rates have gone up, you might have to make the choice between lapsing on your life insurance and losing the policy or selling it and having enough money to cover your essential costs of living. The cash you get for selling it could give your bank account a cushion for emergencies.
Advantages of Settling Your Life Insurance Coverage
There are many advantages to settling your life insurance coverage. When you no longer have dependents who would need the money to pay for their living expenses, you can use the money to improve the quality of your own life. Perhaps you could take a trip or join a golf club with the cash that the settlement frees up. You could also use it to fund a grandchild’s education or wedding. Take the time to consider these life insurance settlement options and make a choice that will give you confidence about your financial future.