How to Help Your Parent Decide Whether They Should Sell Their Life Insurance
The senior years are full of financial decisions with considerable implications for both the older generation and their children, and the plague of scams against seniors lead their advocates to proceed with extra caution. But for many people over the age of 65, selling a life insurance policy is a wise move with the potential to help meet other needs.
The life settlement industry has undergone significant change in recent years, and if your parents have an insurance policy that is no longer serving them well it might be the optimal time to look for a seller. But what considerations go into such a decision? How do you know if it’s the best choice for the seniors in your family?
When to sell your life insurance policy?
First, children seeking the best option for their parent’s life insurance should educate themselves on the potential reasons for selling. If your mother or father is having trouble paying the premiums, if they need extra income for medical or long-term care, if they are over insured or the situation of their beneficiaries has changed so they no longer need the policy, they might be better off arranging a sale.
Your research should also include questions about the tax implications of either holding onto a policy or selling it. For example, recent changes in the estate tax have created added value for whole and universal life insurance policies, which are usually the types of policies best suited for a settlement. A trusted CPA or financial advisor can be a valuable voice in helping determine the best option for your parent’s individual situation.
Once you determine that your parents will benefit from a life settlement, an easy next step is the Magna Life Settlement calculator, which projects the approximate payout for your life insurance policy.
Because the sale of a life insurance policy affects family members beyond the policy holder, the consideration of a life settlement should be approached carefully, with plenty of input from everyone involved. After you have gathered all of the pertinent information and are ready to begin the life settlement process, you may begin by filling out an online application. If you have any questions, please contact us! Magna has case administrators trained to answer all of your questions and clarify the steps and timetables of your life settlement.