How to Sell Your Life Insurance Policy Successfully

You may have purchased your life insurance policy when you were thinking of securing your family's future if you die. Now, for some reason, you can no longer afford to pay premiums. Or you may need to handle an emergency, and you're considering selling your life insurance.

The process you undergo to sell life insurance policy is known as a life settlement.

How Does Selling Work?

When you sell your life insurance, you give up your policy and the associated death benefit to a buyer in exchange for funds. The buyer then takes over your premium payments and becomes the beneficiary of your death benefit.

The funds you will receive from cashing out a life insurance policy will be more than the total cash value of the life policy but will be less than the death benefit. The exact amount depends on the following:

· The cash value,

· The premium value,

· Any unpaid loans against the insurance, and

· Your life expectancy based on age and health factors.

Investors will pay more to a seller with a shorter life expectancy.

It is also vital for you to know that universal or whole life policies are worth more to investors. Term life policies that have the option to convert to permanent insurance policies will sell well too.

How to Successfully Sell Your Policy

#1 Get Professional Help

If you have decided on a life insurance buyout, you will need to get a licensed life settlement broker who can represent you or a life settlement provider who can offer you a reasonable buyout.

You can schedule a policy evaluation. During the session, the professional will assess your unique situation. Michael Brohawn of Your Life Insurance Solution conducts a free policy evaluation.

#2 Review All the Financials

Write down all the financials, including tax implications and any other fees that may come up. Then ensure that you understand every detail.

If you feel pressured into cashing out on a deal, you can call for a time-out to consider all your options.

#3 Get Multiple Offers

Finally, don't settle for just any buyer that you encounter. You should shop around to get the best value for your life insurance policy. Then review offers from several buyers. Know the costs involved in each offer and compare them against your policy's cash surrender value.

If you are ready to sell your life insurance policy, the team of experts at Your Life Insurance Solution can provide you with professional help.

  

Concise Guide To Choosing A Life Insurance Policy

A life insurance policy is an agreement between you and an insurance company. You pay premiums to the company. In exchange, your beneficiaries receive an agreed sum after your death.

Choosing a policy can sometimes be daunting. But it's vital to consider the following before making your choice:

Benefits Involved

Insurance plans have different benefits. Term life offers only a death benefit to the beneficiaries. Universal life insurance is more flexible. You can borrow against the policy, use the cash value, take advantage of the investment options, or decide to sell your life insurance.

Insurance Cost

What policy can you afford at the moment?

Universal and whole life are more expensive but offer more flexibility and benefits.

Term life is affordable for young people who are in good health. But that doesn't make it the cheaper of the lot. A term policy has no cash value and expires after the term ends. To renew it, you'd have to pay higher premiums. Besides, if your health declines, your payment increases.

Whole life insurance, on the other hand, has set premiums for the duration of the policy or throughout your lifespan.

Using cost as a criterion to pick your insurance policy shouldn't be dependent on how much you initially pay for it. You'd need to consider premiums payment, payouts available, convertibility, and how much you'd be paying for the policy in the long run.

Period

You may need life insurance for a short period. If you have a limited budget but need a large amount of coverage, getting a term life policy might be the best option.

In this case, coverage stops at the end of the term.

To help you not lose money if you're still alive by the time the insurance lapses, purchase a convertible term policy. You can convert it into permanent insurance a few months before it expires. Then, consider cashing out life insurance policy after the conversion to get your money.

Another option is to opt for combination policies. They enable you to cash in life insurance and get a payout when you’re still living. Such circumstances could include ill health or an accident.

How Much You Need

Your reason for purchasing a life policy will determine how much you’ll need. If you’re trying to create a financially secure environment for your family after you’ve passed away, consider several personal factors.

You may need to bump up your coverage if you have young children or massive debt. If you have estates and investments, on the other hand, you may only need little insurance.

Aim to choose an insurance policy that suits your needs and can comfortably replace your income if you pass away.

6 Reasons to Sell Your Life Insurance

Having a life insurance policy is an excellent investment. It gives you peace of mind and acts as a cushion for your beneficiaries' future.

So, why would there be any reason to sell your policy?

Most people sell their life insurance because they believe that the money they'll get at the moment is more vital than the death benefits for their dependents. On the surface, that might look self-serving. But there could be cogent reasons why you would sell your insurance. Here are some of them:

#1 You No Longer Have Dependents

You might have bought insurance to mitigate financial hardship for your dependents in the event of your death.

But if your beneficiaries have passed away or they have become wealthy, they won't need the benefits from the life policy. In that case, selling life insurance policy for cash might be the more reasonable action to take.

#2 Your Beneficiaries Have an Alternative

If you saved up more money in the bank or you have other investments like stocks and bonds, then your beneficiaries will have alternatives. Your spouse and children may not need protection from the policy.

It might make sense to sell your insurance and use the money for something more vital.

#3 Your Term Policy Is About To Expire

Instead of letting your term life insurance lapse, you can convert it to a permanent policy and sell it.

You can only convert your term policy if you have a conversion rider. You’ll also need to take action about six months before the term ends.

#4 You Have a Financial Emergency or You Need More Cash Now

Getting older attracts more bills. You might have to boost your retirement income, or you have increasing medical bills to pay. You may even need to invest in a project that yields higher dividends.

If you have a terminal illness or you need to pay for long-term care, you could cash in life insurance to help you.

#5 You’re Overinsured

You might have more coverage than your dependents need. You and your beneficiaries might even have several high-dollar policies.

If you have more insurance than your beneficiaries would need for financial coverage after you’ve passed away, consider selling one policy.

#6 You Can No Longer Afford the Premiums

Retirement could reduce your monthly income and put you on a monthly budget. Other circumstances could also lead to a tight financial situation.

At this point, paying premiums for your life policy or doling out funds for premiums that increase with the age of the insurance becomes expensive. You can sell your life insurance to get an upfront payout and eliminate premium payments in the future.

There are several reasons why you might want to sell your policy. Make sure your reason is compelling and consult a professional to get the best sales possible.

Borrowing Against Your Life Insurance Policy

A permanent life insurance policy, either universal or whole life, usually has a cash value that accumulates interest over time. You can borrow against your permanent life insurance policy based on its cash value. The policy will then become collateral for the loan.

If you have a term life policy, on the other hand, you cannot borrow from it. It has no cash value outside the death benefit and expires at the end of the stated term.

Is It A Good Idea To Borrow From Your Life Insurance Policy?

Although a life policy should provide money for your loved ones when you die, you can borrow against its cash value while you are still alive. When you borrow from your life insurance, you are essentially borrowing from your own money.

Borrowing is entirely different from when you sell your life insurance policy. Selling gives your beneficiaries no future rights or benefits. But borrowing still leaves them with a policy.

Borrowing from your permanent life insurance may be an excellent option to consider:

· If you plan to pay back the interest and cash value within a reasonable amount of time

· If the amount you want is less than the cash value of the policy

· When you need a loan for a brief period at a low-interest rate

· During an extreme emergency

What Happens When You Borrow From Your Permanent Life Insurance?

Your borrowed loan remains tax-free since it is not an income. You will, however, pay back with interests. But this repayment schedule is easy and flexible.

If you do not pay back the loan when due and you die, the amount of the loan and the interest accrued will reduce the death benefit. If the outstanding amount reaches the size of your insurance cash value, the policy will lapse.

How Much Can You Borrow?

You can borrow as much as 90% of your total cash value. Borrowing against your insurance means you can only take out a partial amount of the cash value and keep your policy active.

This payout is unlike a life insurance buyout where you can cash-out on everything.

How Do You Borrow From Your Policy?

If you have an interest in cashing out a life insurance policy, you will first need to contact your insurance company. They will help you determine the right payout means and also monitor your balance to help you keep up with repayments.

Conclusion

Borrowing against your life insurance policy is only possible if you have been paying a premium for some time. If your insurance is new, it might take some time before you can borrow against it.

The cash out time will depend on the size of your policy, the amount of premium you pay, and your insurance company's policies.

Ways to Use the Cash Value in Your Life Insurance

Cash-value life insurance has life coverage and an investment account. Besides the death benefit allocated to your beneficiaries after you pass away, the policy has a cash value, which is money that grows with tax-free interest.

The cash value is for your benefit. If you don't utilize it before you pass away, it goes back to the company. Then, your dependents only get the death benefit.

You wouldn’t want such a significant sum to go to waste. Instead, you can use your cash value in different ways.

Increase the Death Benefit

If your cash value is a large sum and you don't need the money, why not use a paid-up addition. The purchase increases the death benefit, leaving a more substantial amount for your beneficiaries. That way, you won't lose the cash value you've built up.

Not all insurance companies offer this option. Be sure to check with your insurer before you proceed.

Take a Loan

You might have high-interest loans, poor credit, high-interest advances, or payday loans. In that case, borrowing against your life policy is the best option - you cash in life insurance at a low annual interest rate.

You're not obligated to pay the money back within a specific timeframe because you're borrowing your money. You also don't have any underwriting requirements, and the loan history doesn't appear on your credit report.

However, the loan accumulates interest. The value of the borrowed amount will also be deducted from the death benefit if you pass away before paying the outstanding.

Surrender Your Life Insurance

You can surrender your policy to the insurer for the accrued net cash value. The net value is lower than the total cash value. Plus, you give up your death benefit in the process.

Your insurance company will also charge surrender fees, which further reduces the cash value. Additionally, you'll pay income tax on the amount received.

Sell Your Policy

You could sell your life insurance if your beneficiaries are financially secure or the premiums have become too expensive.

When selling life insurance policy for cash, the company pays you an amount that’s higher than the cash value but lower than the death benefit. Before the sales, it’s advisable to go through an independent consulting service like Your Life Insurance Solution so that you can receive the highest payout possible.

Conclusion

You can only use the cash value of your life insurance before you pass away. As it accumulates, consult an insurance professional like Michael Brohawn and have a concrete plan of how you’ll put it to good use while you’re alive. If you don’t use your cash value before you die, it ends up with your insurer.

5 Benefits of Owning Life Insurance

Life insurance plans are usually purchased if you have young children or beneficiaries who depend on you financially. In the event of your death, proceeds from the insurance can help take care of any need that may arise.

Some benefits of owning a life insurance policy include:

Financial Protection

Life insurance provides your beneficiaries with financial protection when you pass on.

It will protect your family from any financial hardship that occurs after they lose you. They’ll be able to pay for a mortgage, tuition, and any future expenses. It can even take care of immediate needs, such as expenses that may arise from your funeral.

Also, if you ever have a debt before passing on, the policy will help your family settle your debt.

Taxation Benefits

Life insurance policies have tax-free death benefits payout. Your beneficiaries won't pay taxes for the money they will receive.

The insurance plan also has a tax-free cash growth value. When you buy a policy, you don’t have to pay tax on the interest your account earns grows. If you decide to borrow from your cash value, you can do that tax-free in most cases too.

Cash-out

When you purchase a permanent life policy, your cash value grows as you pay your premium and collect interest over time.

Apart from your beneficiaries having access to your policy when you die, you can sell your life insurance for cash while you are alive. This life insurance buyout is a good idea if you decide that you no longer need the policy. You can also borrow from the cash value if you have a need but do not wish to give up the entire insurance.

Flexibility

If you buy universal life policy you can adjust your premiums to suit your financial needs. For a term life insurance with an option to convert, you can extend the insurance to include lifetime coverage.

Some policies also allow you to take out part of your death benefit if you become terminally ill and require expensive treatments.

Affordability

Depending on the policy you purchase and your situation, life insurance can be affordable. Term life is usually cheaper than the whole or universal insurance.

Younger and healthier people also get lower rates.

Conclusion

The primary goal of having a life insurance plan is to save up for your beneficiaries. But cashing out a life insurance policy might become necessary if you have an urgent need. No matter how things turn out, life insurance will always benefit you.

Why Should I Review My Life Insurance Policy?

Too often, policy holders overlook their life insurance policy reviews. Home and car insurance policyholders review their policies regularly – at least once annually. On receipt of the renewal notice, policyholders quickly note changes over the past year. Such routine checks update you on your policy status. You can then decide whether or not to continue with your policy, modify, or switch to something different.

Sadly, many are rather lax about their life insurance. Given its long-term package status, it’s easy to procrastinate. The consequences may be costly if necessary reviews delay till policyholders’ demise. Ideally, book an appointment with your company rep or agent regularly.

Why You Should Review YourLife Insurance Policy

We experience change as we go through life. Regular policy updates help detect loopholes in your policy. Without regular reviews, you may soon discover you’ve been financing an irrelevant coverage. Besides, policy review may expose policy updates and, as well, help you take advantage of recent industry-based developments.

When Should You Review YourLife Insurance Policy?

Experts recommend annual life policy review. However, life insurance policy is most necessary after certain life events, including:

Income Change

If lately you landed a good-pay job after college or got a job promotion, consider a policy review. Conversely, job loss may also inspire a review. In either case, a life insurance policy reevaluation modifies your policy to mirror your current financial condition.

Change in Health Status

If a significant health condition improves, congrats. Ideally, such health shifts should reflect on your health insurance premiums and life insurance rate. Often, such discounts are substantial.

Reversely, when one’s health deteriorates, it may be impossible to increase personal coverages. However, you may increase group coverage via work where insurability proofsare irrelevant. Either way, a policy review is a win.

Change of Relationship

If you just got married or divorced, consider an insurance review. Your coverage should reflect your new life. A newly divorced, on the flip side, may not need as much cover any longer.

Change of Housing

Did you offset your mortgage recently? Your life insurance needs may have become leaner. Contrarily, if you acquired a new home, your liability, upon passing, increases.

Either status needs to reflect on your life insurance – hence, a review.

Change of Beneficiary

If your policy beneficiary passes on or, for whatever reason, needs replacement, you’ll need a policy update. The same holds if you wish to add a new recipient.

Due-For-Expiration

As your policy approaches expiration, quickly consider a review. If there are no significant changes, you may want to compare different brands.

Summarily, if you ever get stuck, an expert life insurance policy consulting company will lead you through the options.