You might not know that you can sell your life insurance property to get cash now. If this idea appeals to you, make sure you do your research before you exercise the little-known option of selling your life insurance.
Why People Sell Their Life Insurance
The reasons someone might want to part with a life insurance policy, can range from highly practical to downright inadvisable. The bottom line is, not everyone wants to continue paying premiums for a policy that will only benefit someone else. Here are some of the common reasons people give for exchanging their life insurance for cash:
How to Sell Your Life Insurance Policy
If you and your financial advisor decide that selling your policy is the right decision, you will need to compare the companies that buy life insurance policies. Here is how the process works. The “life settlement company” will pay you around 20 percent of the benefit value of the policy. The company pays the premiums for the rest of your life and then collects the full amount. The person you designated as the beneficiary will no longer get any proceeds from your policy.
Make sure you deal with a reputable company. Check with the insurance commissioner, consumer protection agency, and Attorney General’s Office to see if the company has a history of complaints or lawsuits. Some of these life settlement companies are reputable firms, but con artists try to defraud people every day through a variety of schemes, including posing as life settlement companies. Because of the high potential for consumer fraud, the federal government regulates this industry carefully.
You might want to talk to an elder law attorney near you about how the regulations of your state differ from the general law of this article.
HuffPost. “3 Not-So-Crazy Reasons To Sell Your Life Insurance.” (accessed October 9, 2019) https://www.huffpost.com/entry/3-notsocrazy-reasons-to-s_b_11440812
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