Letting go of a life insurance policy that you no longer need or can’t afford is a bittersweet process. Once it’s gone, you’re no longer burdened with it, but what about all the premium payments you’ve invested into the policy over the years?
If you choose to let the policy lapse or surrender it, you’ll let go of everything you’ve invested. Instead, more policyholders are turning to the secondary market to seek a life insurance settlement.
Before you let your policy go for nothing, consider selling your life insurance policy in the life settlement market. It’s a much better option than giving it up and writing off what you’ve invested into it so far.
Who Qualifies for a Life Settlement?
A life settlement is a wonderful alternative; however, there are many variables that come into play when determining the value of your policy.
The policies that perform best on the secondary market typically belong to policyholders who are over the age of 65 and have a death benefit of at least $250,000. If you meet both criteria, the amount you can expect to settle for will depend on a few important factors. For example, the specific amount of the death benefit the buyer will receive versus the number of premiums remaining will strongly influence the buyer’s offer.
Age is also a considerable factor, as buyers will prefer to invest in policies that will pay out sooner. Fortunately, there’s no cost or obligation just to see who qualifies for a life settlement, so it’s a good idea to find out whether you do.
Types of Policies for Settlement
The type of policy you have is also a big determinant of the level of interest you’ll see from buyers. The most common types of policies on the market are universal, whole, and term life insurance policies. Universal policies are among the most common ones on the market due to skyrocketing premiums that policyholders can no longer afford.
If you have a universal or whole life policy, you may have a bit more competition on the market, but you’ll also have a higher percentage of interested buyers. Term policies also draw interest, but they need to be converted into whole life or universal life products first.
Once you’ve determined whether you want to sell your life insurance policy, you have the best chance of getting the highest value for it by working with a knowledgeable broker. When you’ve made your decision, give us a call to find out just how much your policy is worth!