A look at the various options for selling a life insurance policy.
Most people will buy a life insurance policy when they’re looking for ways to protect their family after they’re gone. With this kind of coverage, you can pay premiums to ensure that your loved ones have the money that they need to pay for things like bills and funeral expenses when you pass away. Although it’s not nice to think about the point when a family member might need to cash-in on one of these policies, they do come in handy.
However, there will be occasions in some people’s lives where an opportunity might present itself to sell your contract. You might decide to do this because you need some extra cash to pay for when an emergency occurs – like medical bills. Some individuals take early payments because they no longer need their old program – perhaps because they have a new one elsewhere. So how does this transaction work?
How Do You Sell an Insurance Policy?
When you decide to sell your protection contract, you’ll begin comparing your payout options from available life settlement companies. These are companies that offer you a payout that’s often a little lower than what you would get from a full death benefit, but higher than what you might be offered for something like a surrender value. If you’re unable to pay your premiums, then your protection company can offer you a surrender value to give up your policy.
To make sure that you’re getting the right price for what you’re offering, your life insurance company will send an expert to evaluate and value your plan. This will mean that you can essentially get a quote for your sale – just as you would if you were selling a house. There are special kinds of settlement offer that you might be able to access in specific situations. For instance, a viatical settlement is designed for people who have a life expectancy of less than two years, or a critical illness.
Are There Other Ways to Get Money from a Policy?
If you decide that you don’t want to sell, but you still want to access some extra money from all those premiums that you’ve been paying, there are a few other options available. For instance, you can take a cash surrender, as mentioned above, but it’s unlikely to give you as much as you would get if you sold your plan outright. Another option is to consider speaking to the company about whether you can borrow some of the money from your program. This could give you access to a handful of tax-free funds, while allowing you to maintain your protection.
There’s no one-size-fits-all approach to accessing money from these kinds of policies, which means that your best bet is usually to speak to someone who specializes in borrowing from or selling insurance. For some people, a sale will be an excellent way to access some extra cash without the worry of dealing with another loan. For others, it will be better to maintain the peace of mind that insurance can provide.