Some might consider selling a life insurance policy to be like finding a golden egg in your retirement nest. It may have been there all along, but you didn’t know it held a value on the secondary market without someone dying. But it may. Now, how much is your golden egg worth?
Before you consider selling your life insurance policy, it’s crucial to have it evaluated to determine its value. You can often choose from several generic formulas online or reach out to a company for a free policy appraisal. A life insurance policy appraisal can easily be calculated using basic policy and personal information. Typically, you can expect to receive anywhere from 10% to 75% of the face value if you sell your policy. This means that a life settlement’s value can be between $10,000 or up to $75,000 if you own a $100,000 policy. Your health conditions and policy premium requirements determine the cash payment amounts when selling your life insurance policy.
Benefits of a Life Settlement
While the sale of your policy might not significantly impact your retirement, it can still be very beneficial if you deal with paying for health issues or want to complete a few items off your bucket list. A life insurance settlement can also be helpful if you are tired of making payments on your policy and no longer need it. Exploring your options can help determine if selling your life insurance policy is the right decision for your situation.
- You get the value of your policy now.
- You get more cash than by surrendering or lapsing.
- You reduce or eliminate the burden of costly premiums.
Age for a Life Settlement
Only some people are eligible for a life settlement, as these deals are often limited to policy owners at least 75 years or older. You are also more likely to qualify for a life insurance settlement if you are in poor health, regardless of age. Also, it’s important to remember that universal life, whole life, and first-to-die policies are all eligible for a life settlement. Term life insurance is also eligible depending on the health of the insured and conversion options. Usually, the face value of a policy needs to be more than $100,000 to qualify for a life settlement.
Can You Sell Your Life Insurance Policy?
Yes, you will need to own your policy for at least two years before you try to sell your life insurance policy. Most states regulate life settlements. Most life insurance companies do not want you to know about this option. They hope that most will lapse or cancel the policy so that they can make more money. Keeping these things in mind can help you determine if you should sell your life insurance policy.