Selling a Life Insurance Policy For Cash
It is your right to sell a life insurance policy that you no longer need to a 3rd party under the life settlement clause. The sale involves transferring your claim over the expected payout to a third party investor in exchange for cash. The investor offers immediate cash payment (also known as a life insurance buyout) and continues paying the life insurance premiums up to the time of your passing when they can then claim the full settlement from the insurer.
Life Settlement companies like Magna Life Settlements, help you sell your life insurance policy from the comfort of your own home, over the phone and online today. With the promise of the insurer passing over a pre-determined amount of cash to your beneficiaries upon your demise, you are expected to pay monthly or quarterly premiums to the insurer.
But what happens when you are unable to pay or feel like you don’t want to continue with the life insurance policy? This is when a Life Settlement comes into play.
What you will learn:
How much cash can you expect from the sale of your policy?
How much money you receive from the life insurance sale depends on a host of factors set out by the third party investor. In most cases, the investor considers such factors as the value of the policy, your current health condition, and age.
The average settlement ranges from 20 to 25 percent of the value of your policy. The subject is nonetheless open to negotiations, and this has seen the settlement value shoot to as high as 50 percent of the policy size. You should, however, note that not every subscribed life insurance qualifies for settlement.
Eligibility Requirements to sell your life insurance policy?
Almost every third-party life insurance investor has eligibility criteria that they use to screen individuals seeking to sell their life insurance. Nonetheless, some of the standard procedures followed by most investors include the fact that you must be above 70 years of age and have a policy value of more than $50 thousand. Most companies also prefer universal, whole life, and convertible term life policies.
The regulations are, however, not set in stone. Plus, the stiff competition has forced some companies to accept policies for individuals aged 65 years. Most investors will also overlook the age limit, especially if the insured is terminally ill with a life expectancy of less than two years.
When does selling a life insurance policy make sense?
Non-payments of premiums
Insurance companies may decline to honor a life insurance claim if you stopped or have been inconsistent with paying premiums. Therefore, in the event financial constraints make it impossible to honor the regular premiums, remember that you have the option to sell the policy in a life settlement rather than allowing the insurance company keep the money.
Medical expenses and emergencies
When pressed by large medical expenses that need to be paid up front, you can always count on the proceeds of the settlement. Though saddening, health complications may in actual sense raise the settlement value of the policy where the investors project a lower life expectancy.
How to maximize the settlement amounts that get to your bank
Life policy settlement is taxable under income and capital gains. With the government taxing the settlement, the last thing you need is a broker or insurance agent seeking to dig further into the little left. Maximize the amount of the settlement that gets to your bank account by working with inexpensive agencies, and, if possible, reach out to the investor directly.
Contact Magna Life Settlements to get a free estimate on how much cash you can get from your life insurance policy!