Numerous requirements need to be met before you can sell your life insurance. For example, the face value of the policy usually needs to be at least $50,000, while the policy owner needs to be at least 70 years of age or older. The age of the policy also matters as each state has a waiting period that can range between two to five years before you can sell your policy.
People choose to sell their life insurance for various reasons. You may no longer need the coverage, or the premiums may cost too much. Your term policy might expire soon, as continuing coverage is often more expensive. Comparing all of your options is vital in helping you to make the best decision.
The process for selling life insurance includes giving your provider permission to view your medical and insurance records. Once eligibility is confirmed, the underwriting process begins to estimate the policy’s value. You can work with one or more parties interested in buying your life insurance before deciding on a final offer. Afterward, you will exchange ownership of the policy for cash.
You may have second thoughts about selling your life insurance policy. Fortunately, you can change your mind during the life settlement process. Additionally, there is a recission period, usually around two weeks, which gives you the flexibility to back out of an offer you previously accepted.
One of the advantages of selling your life insurance policy is that it allows you to receive a large sum of money. You can spend this money in any way you like, whether it’s paying off debt, creating an emergency fund, or planning a vacation. A life insurance settlement is much more valuable than surrendering your policy.
The entire life settlement process usually takes anywhere from two to four months. However, the length can vary with each case due to numerous factors, such as how long it takes to acquire policyholder documents, the level of interest amongst buyers, and the amount of time spent during the negotiation period.