We know that some of you might be at this position of their lives in which your current life insurance wouldn’t even be worth cashing anymore, or let’s say it’s not your best option.
Well many people have opted for selling their policies for life settlements ending up with cash money in their pockets. Learn more about how this works.
How it works
You can turn your life insurance policy into real chash money, but the process is a bit complicated, not enough for us to explain it. First you will need insurance policy appraised to know the selling value of it, step two would be to find a buyer. Once you have, you will receive a cash settlement and the buyers will proceed and pay you, to later cash any benefits from the insurance when you are deceased.
The tricky part is to find a good and honest buyer, some even say almost impossible, which is the main reason why so many people decide to sell their policy to a company that does settlements or even work with selttlements and brokers like A Life Settlement, who can actually help you on how to sell your life insurance policy.
Some others choose to work with a third party by using life settlement brokers. If you are looking to sell yours to a company, you will receive a percentage of your policy in a more secure and safe way, most of the time with the best deals available. But if you decide to go for a third party individual, you will still have to pay the broker a commission but not being sure if all is done professionally.
What we want you to know
There’s a few tips you should know before you decide to sell your policy:
- Your Life Insurance may not have as much value as you think, this is why we suggest you to get it appraised by a company that knows best before you sell anything, it could be less, but could also be a lot more!
- You won’t get the full value of it, a 2010 research of the US. Government Accountability Office that sellers usually received between 13-21% of the value of their policy. So check all details with your broker or company before doing so.
- Brokers request a commission. Another report says that back in 2009 some brokers got 9% on commission. Also might want to check this detail if your option is a broker.
- Your settlement might be subject to taxes, such as the income tax.
- It is NOT your only option, you can always take a loan against your insurance policy.
In the end all these tips are valuable but there’s always two sides of the story, so we suggest you to discuss this with your financial adviser.
How to sell it
After all selling your policy isn’t that bad, mostly if you no longer need it or can afford all the premiums. If you do decide to sell it, take these following tips in consideration.
• Understand all rules and terms: Your policy has rules for selling and your state laws are the ones who regulate the whole process. You want to make sure you learn these before you try to sell. If you need some help with it your financial adviser could explain you better.
• Don’t take the first offer you get, you might want to shop around a bit or get to know the company or broker better fist. Review a few options just to make sure you are getting the best deal.
• Talk to an expert in the matter, a consultant or financial adviser, once more is always best to talk to before doing anything. Check got tax liability and eligibility changes that you will have to face after selling.
• Don’t forget to check your debts, if you have big debts, the creditors may have a saying in any cash you receive from your life insurance settlement. If you have debts, please talk to your financial adviser as well.
Conclusion
If you don’t want, need or can afford your insurance policy, it is worth a try selling it and see what can you get, just educate yourself better on all your facts and options with an expert, and make sure you get the best offer!
