In this page we give information regarding Selling Life Insurance Policy. We explain why this may need to be done, the options and tips on how to do it if needed.
Why Sell Your Life Insurance Policy?
People who have terminal illnesses usually find it hard financially. A good settlement is an option that can give you a certain amount of money to help you with your expenses.
Known as the viatical settlement, this is the sale of one’s insurance policy to anyone who belongs to the third party. Usually, the policy holder sells his policy to someone to get a percent of the death benefit. As a result, the buyer becomes the owner of the policy and/ or becomes the beneficiary of the insurance policy of the seller. He will also be the one who will continue paying the premiums and collects the entire benefit the moment the insured person dies.
On the other hand, a life settlement may give a good option for a good policy holder who no longer wants to pay policy premium. In a life settlement, the insured person is reunderwritten and an offer is made for the policy basing on their present life expectancy. This offer usually gives more than the surrender value of the policy.
Tips On Selling Life Insurance Policy
If you want to sell your life insurance, it may or may not be the right decision for you to make. However, here are some tips that are provided by the National Association of Insurance Commissioners for anyone to follow. These are all tips which can be applied before getting a viatical or life settlement transaction:
- Contact your insurance provider or your insurance agent so that he will be the owner to discuss to you about settlements.
- Make it a point to consult your financial advisor; remember that he is well-versed with finances and can assess your personal financial needs as well.
- Connect with your state insurance department for more information about current laws.
Aside from the ones mentioned above, you also have to consider any other options like:
- Keeping in touch with a financial expert or a professional tax advisor. Find out the implications of these taxes as not all proceeds come tax-free.
- You have to know that the proceeds are all subject to the claims of any lenders or creditors.
- You also need to learn whether a receipt of cash settlement will cause you to be exempted from any public assistance and other benefits such as Medicaid or food stamps.
- You also have to learn that you need to provide the personal and medical information about you.
Selling Life Insurance Policy Conclusion
So those are the tips that you need to learn and follow before selling life insurance policy. It is advised that you seek professional and financial advice before taking any actions though. This will help you to decide what is the most appropriate action for yourself.