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A Straightforward Guide to Selling Your Life Insurance Policy

People purchase life insurance for different reasons. While some purchase it to protect the financial stability of their family, others buy a life plan to leave cash for their loved ones when they die. The good news for some, however, is that insurance policies can be sold.

If you need urgent cash or you're no longer in need of your life insurance, selling your policy is an easy way to get some money. But before selling your policy, you must make sure to understand how selling life insurance works and its consequences.

Selling Your Life Insurance Policy?
To sell life insurance policy refers to a situation where a policyholder sells the insurance policy and the death benefit associated with the life policy to another investor for an agreed amount.

As a result, the buyer takes over the payment of the premiums and get to receive all death benefits from the policy when you die. The process of selling a life insurance policy is also known as a viatical settlement or a life insurance settlement.

Who Can't Sell their Policy?
It's worth mentioning that not all life insurance policies provide benefits to the buyer. For example, if your policy's life expectancy is long, buyers may not be willing to pay you cash and then pay premiums for up to 20 years again.

A viatical settlement is intended to be a win-win arrangement for both the seller and the buyer. Here, we have identified a few circumstances where your insurance policy may not have any value.

● If the death benefit is small

● Long life expectancy

● Very high premiums

● If it does not have a conversion option

How Does Selling a Life Insurance Policy Work?
To have a life insurance buyout, you must first find a suitable buyer. Although you can carry out the process of cashing out a life insurance policy on your own, we recommend you use the services of an insurance settlement professional.


Information You May Need
When selling your life insurance policy, you may be required to provide certain information like:

● Your personal information including your medical history

● Years of premiums remaining

● Type of insurance policy

● The policy's cash surrender value

Points to Note before Selling Your Life Insurance Policy
● Since insurance is a regulated industry, you must ensure you deal with only licensed insurance settlement professionals.

● Shop around to get an offer with the most value. Never be in haste.

● Consider the financial and tax implications of selling your policy.

● Selling your insurance policy may attract fees

If you're no longer in need of your life insurance policy, then selling it for cash can be an excellent option. Nonetheless, we recommend that you first explore other alternatives and ensure you follow our detailed guidelines in this article before closing a sale deal.

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