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SELLING YOUR LIFE INSURANCE POLICY

So you thought that once you had bought life insurance, the difficult part was over and all you had to do after that was wait to meet your mortality. Well, generally you would be right. However, there is another option for those who wish to reap the benefits of their payday from the outside of a coffin, because you can actually sell your life insurance. Hence, if you think buying life insurance is a task, try selling it! This article will explain just how you can do this.

Selling life insurance is becoming an increasingly popular option for elderly individuals who have reduced or removed their debts and liabilities or who can no longer afford their premiums and don’t want to throw away everything they have put into their policy for nothing in exchange.

The process of sale is much simpler than you might think. The owner sells the policy to an investor for a proportion of the policy’s face value. The investor then continues paying the remainder of the monthly payments until the policy holder dies, at which point the said investor receives the lump sum that the policy guarantees. It’s wise to remember that some investors will not purchase your policy unless all listed beneficiaries have been alerted as the sale will ultimately affect them in the future. Make sure you consult all loved ones who will benefit from the policy before you sell it to an investor, as this makes the process smoother and easier, especially with the tendency for some buyers to go as far as request permission from beneficiaries before taking on a policy.

There are two types of life insurance settlements that determine the amount of risk an investor must take when buying somebody’s life insurance policy. Viatical settlements occur when an investor buys a policy from a terminally ill individual who may wish to use the value of the policy to cover medical expenses so that they can enjoy the rest of their money while they are still alive. An investor may pay the policy holder up to 80% of the policy’s face value because they will have to take on less risk, as they will know approximately when the policyholder will die.

Life settlement takes place when an investor buys a life insurance policy from an individual who is not terminally ill. Generally, an investor will pay less than 50% for such a policy. This is because they do not have an accurate estimate of when the policy holder will die and so, they face the risk of having to continue to take care of monthly payments for a long period of time before the policyholder dies and they can reap the benefits of the policy.

Importantly, you should watch out for scams. There are a number of these types of cons in operation at present, so to make sure you avoid them and that you check that your life settlement investor is licensed.

Lastly, remember that life is for living and that it is your decision if you wish to sell your policy or keep it so that your loved ones can benefit. If you do decide to sell, make sure that you buy from a safe and trustworthy investor. Ultimately, stand by your choice and enjoy the benefits (whether the benefits be the monetary advantages or peace of mind) that it brings.


 

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