If you have a life insurance policy you no longer want or can’t afford, stopping payments or simply cashing it in aren’t your only options – or your best ones.
How it works
You can convert your life insurance policy into cash now, but the process is complicated. First, you’ll need to have your life insurance policy appraised to determine the selling value. Then, you’ll need to find a buyer. Once you have a buyer in place, you’ll receive a cash settlement and the buyer will pay any premiums and collect the benefit when you die.
Finding a buyer on your own can be complicated, if not impossible, which is why many people choose to either sell their policy to a settlement company or to a third party through a life settlement broker. If you sell to a settlement company, you’ll receive a percentage of your policy’s value in cash. If you use a broker, you may also pay a commission to the broker. However, a broker may be able to find a better deal than you would on your own.
What you need to know
There are a few things you should consider before selling your policy. For example:
How to sell
Selling isn’t all bad, especially if you no longer want the policy or you can’t afford the premiums. If you do decide to sell, take these steps to make sure you get the most money.
The bottom line: If you don’t want your life insurance policy, it’s worth a call to find out what you could get, but be cautious about going through with it. Make sure you’re getting the best possible deal before you sign off.
Subscribe to the Money Talks News newsletter