Sell Your Life Insurance Policy!

Your life insurance policy ensures your loved ones are cared for if something happens to you. But sometimes, circumstances change, and the policy you started paying for years ago no longer fits your current needs. You have spent a long time putting money into your premiums, and the cash surrender value your policy may offer is nowhere near the funds you deserve.

Whether you no longer want to pay for an insurance policy, you could do without it, or you cannot afford to keep contributing to your monthly payments, it may be time to pursue new options. A Life Settlement offers you a lump sum cash payment for your policy. Settlement Benefits Association can help you determine Life Settlement eligibility and whether this is the right choice for you. 

Can You Sell Your Life Insurance Policy?

Your life insurance policy belongs to you. Like any other property or asset you own, you can sell it. You can sell your term life insurance policy for cash, following a decision by the U.S. Supreme Court in 1911. Multiple factors affect the value of your policy and the amount that a buyer may pay for it. 

A buyer may be more likely to purchase your life insurance if it has a high face value and you are older or have a short life expectancy. Buyers take on the responsibility of paying the premiums on your policy. The fewer premiums they pay, the more valuable the policy is to them and the more they are likely to pay for it upfront.

There may be restrictions on the sale of an insurance policy. For a Life Settlement, you should be over the age of 65. You can be any age for a Viatical Settlement but must have a terminal illness that reduces your life expectancy to fewer than two years.

Reasons to Sell Your Insurance Policy for Cash

Life insurance has its purposes, but you may have outgrown the need for a policy. Your life situation may have changed enough that you are better served by selling your policy than keeping it. While each person’s reasons for selling a life insurance policy will differ, some of the most common reasons for a Life Settlement include:

  • Changes in the beneficiary’s financial situation: The death benefit of a life insurance policy is typically designed to support dependents. Parents of young children usually purchase policies to protect their children. Once your children are grown and have their own source of income, they are much less reliant on your financial support.  
  • Need for cash: You may find yourself in a situation that requires an influx of cash, such as unexpected medical bills. It could also be that you want to travel or make a large purchase and need cash to cover it.  
  • Eliminate life insurance premiums: As long as you have a term or whole life insurance policy, you must pay premiums. Those premiums are just another monthly expense. Eliminating them would free up cash in your budget and allow you to purchase more useful or valuable items. Removing your monthly premium payment can help you adjust your budget as other living costs increase.

Frequently Asked Questions

As a Life Settlement broker, we help you find the best company to sell your life insurance policy to. The companies that buy your life insurance policy are called Life Settlement providers. They are often banks or other companies who view the purchase of life insurance policies as an investment. 

After buying a policy, the Life Settlement provider pays the premiums and collects the death benefit once the original owner passes away. Ideally for them, the value of the death benefit will be more than they paid for the policy and premiums combined.

As part of the Life Settlement process, we work to increase your policy’s price. We do so by collecting bids from multiple buyers. The more demand there is for your policy, the more buyers will pay. We work to get the most bids possible in order to increase competition and the value of your policy.  

How much you can sell your life insurance policy for depends on the size of the policy and your life expectancy. The demand for your policy also affects its sale price. Your health and the cost of the premiums also play a role. 

In many cases, people in the best health will not get the best offers on their life insurance policies. The buyers do not want to risk buying a policy they will need to pay premiums on for many years. The cost of the premiums can also make a policy more or less valuable. If the premium payments are low, buyers may be more likely to submit competitive offers on the policy.

A policy with a high death benefit will get higher offers than one with a low death benefit. Usually, the minimum policy amount is $100,000.  

Contact us to see how much your life insurance policy may be worth to a buyer. We are happy to examine your policy and situation and provide an idea of whether a Life Settlement will be valuable to you. There is no obligation for this initial, informal chat.

Whether you pay taxes on your Life Settlement depends on the type of settlement and how you use the proceeds. If you are terminally ill and pursue a Viatical Settlement, you may not have to pay federal tax on it. State tax laws vary.

Our tax estimator can help you better understand the potential tax obligations of a Life Settlement. We recommend showing the results of the tax estimator to your tax preparer or accountant. They can give you a better idea of your responsibility and what you may owe the government after a Life Settlement. 

Life Settlements follow a defined three-step process, and we are here to guide you at every stage. Learn more about the process by exploring our online resource to see the steps involved.

Those who purchase life insurance policies in exchange for a settlement do so as an investment. In the secondary market, buyers are often institutional investors, such as banks or credit unions. Other groups may purchase policies to bundle and resell proportional interests to individual investors, much like traditional mutual fund shares.

At Settlement Benefits Association, we have long-term relationships with over 20 trusted funding groups for your peace of mind.