Financial priorities change as you move through life. If you no longer want your life insurance policy and would prefer to stop paying premiums and instead receive a lump sum of cash for your policy - possibly significantly more than the current cash value of the policy - it can be done through a transaction called a "Life Settlement."
Your first thought probably is, "Well, how much can I get if I sell my life insurance policy for cash?" Read on to learn about the factors that determine your life insurance policy value and for a couple examples, as well as how life settlements work. It's noteworthy to point out first that several types of policies qualify for life settlements - even selling a term life insurance policy for cash is possible, including nonconvertible term policies under limited circumstances.
Does Your Policy Qualify for a Life Settlement?
A life settlement refers to the sale of an existing life insurance policy from its current owner to another party. The policy is sold for an amount that is more than its cash value but less than the amount of the death benefit. Under certain circumstances, policies can sell for well over 10 times their cash surrender value, which makes this option appealing for policy holders. Term policies or permanent policies with zero cash value can also qualify - the value of the policy is determined by the coverage amount of the policy, not the cash value. The buyer assumes ownership of the policy and the responsibility for paying the premiums. The buyer will also receive the death benefit when the insured passes away.
Before you can consider selling your life insurance policy for cash, it should meet certain conditions. The policy typically must include a death benefit of $100,000 or more. The insured is usually over age 70 (though younger insureds may qualify) and has experienced a negative change in health status since the policy was issued.
Determining the Value of Your Policy
There is no specific formula to answer the question, \"How much can I sell my life insurance policy for?\" The particulars for every case are unique. In general, however, these are the key factors that will determine the life settlement value of your policy:
The amount of the death benefit
The cost of premiums
The life expectancy of the insured, based on the individual\'s age and medical condition
The type of policy
The rating of the issuing insurance company
The Life Settlement Process
The life settlement process includes the following steps:
You, your insurance agent, or your financial advisor contacts a life settlement broker to have an initial conversation regarding your personal situation. (A life settlement broker represents the policy owner in an effort to obtain the maximum value for the policy.)
You complete an application, providing information about your policy and your health history.
Your broker will obtain offers for your policy from various life settlement buyers.
If you accept an offer on your policy, the sales proceeds are placed in escrow until your insurance company transfers the ownership and beneficiary of the policy. Once ownership and beneficiary changes are completed, the sales proceeds are released to you.
How IMS Settlements Can Help
We can provide you with a fast and free appraisal of your policy so you may have an idea of how much you can sell your policy for.
Life settlement brokers can help ensure that you get the largest sum of money possible for your policy. They will also walk you through the process, helping you avoid any hassles or headaches.
If you are considering selling a life insurance policy for cash, contact IMS Settlements. We have an extensive, well-established network of life settlement providers that purchase these policies - and by soliciting multiple bids, we maximize the value of your existing policy. We've been working with financial professionals and life insurance policy owners for years. For a free evaluation of your policy and more information about how we can help you, contact us today.
"IMS Settlements was transparent, fast, and delivered
an unbelievable offer for my universal life policy."
- Bruce H.
IMS Satisfaction Guarantee
We hold ourselves to the highest standards of Service and Professionalism so if you don't like our work or our offers - let us know in writing and we will turn over your file.