Selling Insurance Policy Can Give You The Money You Need Now

Selling insurance policy is becoming a popular option for people of or nearing retirement age, whose debts and other obligations have all been paid off. There are several reasons you might want to cash in on your life insurance policy. You may want to travel, start a business, or set it aside for medical care.

For retired people who don't want further insurance life policy selling may be more profitable. But this is a relatively new trade, and the industry is not heavily regulated. It's important to know how settlements work, what to expect, and what to watch out for before selling.

How it works:

Most life insurance policies are sold to third-party investors. The buyer evaluates the policy according to its face value and the policyholder's health. Life settlements usually set a minimum face value for the policy, which may be anywhere from $100,000 to $250,000. People selling insurance policy also have to be over 65 and in good health. Basically, your buyer needs assurance that you will live for the next 20 or so years. The longer you're likely to live, the more your buyer will get from the settlement.

After selling insurance policy, your investor becomes its beneficiary. They will pay all the future premiums and get all the death benefits when the holder dies. This also means that they take on the risks carried by your policy. Your provider might close down, or you may die before the projected date. To compensate, they will only pay pay a small part of your policy's face value. They may also check on you periodically by sending you postcards, which you have to send back to let them know you're still alive.

Viatical sales:

Another type of insurance life policy selling is called a viatical. These sales are offered to policy holders who are terminally ill. Because there is assurance of the holder's time of death, viaticals are far less risky, and thus worth more than senior settlements. A viatical can pay you as much as 80% of your policy's face value, whereas a senior settlement can get you about 20%.

What to consider:

There are also some disadvantages to insurance life policy selling as far as the seller is concerned. When you need medical care after you've sold your policy, you may no longer be covered by your insurance company. That's why you need to make sure you're in top shape when you sell. Your beneficiaries might also lose their insurance benefits.
Settlement fraud is also a major concern for people selling insurance policy.

Scams are fairly common, as the industry is fairly new and not yet strictly regulated. One such practice is "wet paper," in which the investor convinces you to buy a policy only to sell it back to them later on. "Cleansheeting" is also a common scam where the company alters your medical record to make you qualify for a policy.

Cashing in your life insurance offers a lot of ways to make better use of your money. By selling insurance policy, you can get rid of monthly premiums, better support your dependents, and enjoy your hard-earned investments anytime you like.