What Do I Do If I Want To Sell My Life Insurance Policy?

What Do I Do If I Want To Sell My Life Insurance Policy?

Mysteries can be entertaining as movies or novels. That’s not the case, however, when you are involved in a financial transaction that can impact your future. In that circumstance, you want information and answers, not just clues and guesswork.

One potentially life-improving financial transaction is a life settlement, which you might initially think of as mysterious. A life settlement, after all, involves selling your life insurance policy to a third party for a lump sum of cash, with the third party becoming the beneficiary. Typically, an individual would be unfamiliar with this type of transaction and the process, as most people would not participate in a life settlement more than once (unless you own multiple life policies).

If you are thinking, “I want to sell my life insurance,” learning about the steps involved will remove the mystery.

Demystifying the Process 

There are a handful of steps to follow in a life settlement. To simplify the process to the utmost, your only required step would be to get professional help. When you contact IMS Settlements, we will handle the process from start to finish.

Here’s a quick review of what the steps for a life settlement look like:

  • Review your policy. Start by knowing what type of policy you own, the amount of the death benefit, whether there is any cash surrender value, the amount of the monthly (or annual) premium, and how much longer the policy is in effect if it’s a term policy.
  • Evaluate the market. Contact a life settlement broker to determine the potential value of your policy. The lump sum you will receive could be several times the cash surrender value but will be less than the death benefit. Factors such as the insured’s medical condition and all of the factors mentioned in the first step will play a part in determining what a buyer may be willing to pay.
  • Shop the policy to life settlement providers. Your life settlement broker will shop your policy with the providers. Providers are those who purchase life insurance policies. They are often institutional investors who buy multiple policies regularly. They have the resources to “front” the money, knowing they eventually will collect the death benefit as the return on their investment. The more providers you can get to bid on your policy, the better chance you have of maximizing your proceeds.
  • Complete the deal. A life settlement involves signing a contract, and laws and requirements can vary from state to state. Paperwork must be completed as required prior to your receiving your money.
  • Determine tax liability and then spend or invest proceeds as you see fit. A portion of your proceeds may be taxable depending on how much you have paid in premiums and other factors. The good news is there are no other restrictions on what you can do with the proceeds.

If you are wondering, “What if I want to sell my term life insurance policy?” it’s worth noting that a life settlement broker may also be able to sell your term policy, too. Many term policies can be converted to permanent policies, but even nonconvertible term policies may be purchased by providers in some circumstances.

Should I Rely on Experts When I Want To Sell My Life Insurance Policy?

There are several benefits to working with an experienced and professional broker such as IMS Settlements when you decide to sell your life insurance policy. Most important is that we work with a nationwide network of life settlement providers so we can obtain the best price. We also provide convenience by handling all of the steps involved, and we will ensure the settlement is in compliance with regulations in your state. We also offer a 100% satisfaction guarantee. Contact us for help or request a free evaluation.