How To Sell Life Insurance Policy
As is the case with a considerable number of seniors, you may have reached a juncture at which you can no longer easily afford your life insurance premiums. Many seniors and insurance policy holders often ask how to sell their life insurance policy. In addition, because of your situation, you might no longer have the need for the type of life insurance you purchased at an earlier point in your life. If either of these situations apply to you, consider the benefits of a life settlement.
How Life Settlements Work
A settlement is defined as the sale of an existing life insurance policy. The sale is made to a third party, which is typically some sort of institution or enterprise in the business of making investments like the purchase of life insurance policies.
A senior who enters into a life settlement receives a payment for the policy in an amount above the cash surrender value and yet below the benefit that would pay out to a beneficiary at the time of the policyholder’s death.
Oftentimes, a life settlement broker negotiates the terms and conditions of the underlying agreement. A life settlement broker “shops” the policy around to different potential purchasers as a means of obtaining the best deal for a policyholder like you.
Life Settlement Agreements Versus Viatical Settlements
Some people understandably confuse a life settlement agreement with a viatical settlement. There are similarities between the two types of arrangements, but there is also a major difference. A viatical settlement permits a person to sell an existing life insurance policy when that individual is terminally or chronically ill. Such a requirement does not exist in regard to a life settlement agreement. The state of your health is not a factor in a life settlement.
Financial Return to Policyholder
The amount paid to a policyholder is determined on a case-by-case basis. With that said, the United States Senate Special Committee on Aging conducted a study in which it was determined that the yield on a life settlement averages eight times what would have been the cash surrender value of a policy.
If you have a life insurance policy with premiums you cannot afford, it pays to consider a life settlement.