Can Seniors Sell Their Life Insurance Policy?
Did you know that a life insurance policy is actually an asset? Yes, you can sell your policy any time and there are laws that facilitate this process. Selling your life insurance can help raise the money you need for long-term care needs or for a proper retirement. However, there are many seniors who are still not taking advantage of this option because they don’t know that they can sell their life insurance.
Even wealth managers and financial advisors may lack or have limited knowledge on how a life policy can be sold. However, it’s actually possible to sell your life insurance in a secure and safe way.
So why should you even consider this idea?
Below we have listed some important factors that show that selling a life insurance policy is a legitimate way of raising some extra money for your retirement and post-retirement care needs:
It’s a Highly Transparent Process
Selling your life insurance policy is not a dark alley deal. It’s a regulated and highly transparent process. There are numerous customer disclosures that are provided to the seller before they sell their policy. These include all offers, sales commissions, sale price comparison against the value of surrender etc. The aim here is to ensure that the seller has considered all factors before making the final decision.
You Will Also Be Advised On the Existing Alternatives to Selling Your Policy
The main goal is not always to sell the life insurance policy as soon as a buyer is found. The policy seller will be taken through the available alternatives to selling before any sale is executed. Licensed life settlement insurance buyers are compelled in most states to provide information to sellers about keeping their policy. The licensed buyers are also may indicate that an accelerated death benefit or policy loan might be a better option. They will also disclose the settlement amount relative to the accelerated death benefit available under the life insurance policy.
Before you sell your insurance policy, you will be taken through a number of risks that may arise as a result of the sale. Although the financial gains arising from selling the policy are way more valuable than surrendering it back to the insurance company, there are a few risks involved. These risks include tax consequences and a potential reduction in government benefits after the sale. All these risks will be explained in detail before the sale transaction is completed.
Buyers of Life Insurance Policies Must Be Licensed by the State
Not just everyone can buy life insurance. Life Settlement Providers (buyers) must be licensed by the state they want to operate in. The process of licensing is very rigorous and involves very detailed background checks. The life insurance secondary market is highly regulated and many states are continually implementing measures designed to protect policyholders’ rights and interests.
Selling your life insurance is something that makes a lot of financial sense. There are established legal and transparent ways that will allow you to make the sale so.
Contact our leading life settlement team today to get more information about life settlements and how they may benefit you.