There are many reasons to invest in a life insurance policy, but usually, the primary purpose is to sustain and support the beneficiary (in case of the untimely death of the policyholder).
If it’s included in the policy measures, then while the policyholder is still alive, the payout makes for supplementary income.
In reality, life insurance policies are of no use while the policyholder remains alive and well. This fact (alongside the urgent need for extra cash) is one of the top reasons behind many policyholders deciding to sell their life insurance policies. Selling your life insurance policy is often a better option than stopping payments or cashing it out.
However, the process is not as easy as it may appear. First, you must find a buyer for your insurance policy (which is often the most challenging step). You will also need to have your current insurance policy appraised for its real market value, and then sell it to the buyer – who then gets to reap the benefits of being the policyholder.
Many people today choose to sell their insurance policies when they have no further need for it or can no longer afford the cost. Although the process is complicated, many people have succeeded in the quest to sell their life insurance policies.
When and if you decide to sell, perhaps the biggest shock you will receive is discovering that the policy does not have the market value that you had expected.
A survey conducted in 2010 found that sellers received a mere 13-20% of their policy’s values. These numbers can be severely disappointing to those who are selling because they are in need of immediate cash.
The process of selling your life insurance policy also has another significant caveat – your age. Most buyers are looking for policyholders older than 65 with chronic ailments.
If you are young and free from chronic illnesses (be grateful), your life insurance policy will likely not be of much value to the buyer. If you do manage to make the sell, you still will probably not get the money that you want/need.
These hurdles are why many sellers decide to go with a settlement company or broker to find a sunny deal; selling your life insurance policy to a settlement company gives you a percentage of the policy’s value in cold hard cash.
If using a broker, you usually have to pay a commission of nine percent or more. On the bright side, a broker will be able to navigate you towards a much more favorable outcome.
To help you steer through the murky waters of selling your life insurance policy, contact Esteem America today!