Your Life insurance policy may be worth much more than you think. If you are over age 70, you might be able to profit from your policy now, while you are alive and still here to enjoy it. What’s more, you may be able to sell your insurance policy for considerably more than its cash surrender value.

 

Lifetime Settlement is the process that people use to sell their existing life insurance policies. Companies now exist for the sole purpose of buying old insurance policies as an investment. These companies calculate your life expectancy after reviewing your medical records and compare the cost of keeping a policy in force for what they believe is the rest of your life to the present value of the death benefit they will receive for making the investment. The difference is what they are willing to pay for your policy.

Obviously, the more your health has worsened since you bought your insurance the more the policy will be worth. Both term and permanent policies are eligible to be sold. Until recently, life insurance companies had a monopoly on determining the value of an insurance policy. Term policies generally had no value. Permanent coverage might accumulate small cash surrender values, especially in the early years of a contract. It is no wonder that almost 9 out of 10 insurance policies are surrendered or lapse without value. What people don’t know is that it is estimated that over $108 Billion of life insurance coverage has a “market value” that exceeds the cash value of the insurance policy.

One of our clients, a 75-year-old man who owned a $500,000 term insurance policy that was about to lapse without value, was able to sell it for more than $100,000.

An 80-year old woman had a $1 million policy with a cash surrender value of $100,000 was able to sell her policy for $300,000. She wanted to keep coverage in effect and the extra money that we sold her old policy for allowed her to buy new coverage that had more guarantees than her old policy and a premium that was 20% less!

You should consider a Life Settlement if are over 70 years old and are insured for at least $250,000 of life insurance and:

· If your policy is too expensive or no longer affordable

· If you need new life insurance coverage

· If you no longer need your old life insurance

The process to determine the value of your policy is easy and entails no cost or obligation. A life insurance professional can obtain the necessary authorizations to gather your medical records and information about your policy to determine your life expectancy and what the policy will cost to continue over your lifetime. The professional will then negotiate to obtain the best offer available. Other considerations to weigh in your decision to sell a policy is the amount of income taxes due on any gain derived from the sale, other family member’s desires to continue your policy, and the impact of the sale proceeds impacting your ability to qualify for public assistance programs.

The hard part for many people is to understand that if it is a “good deal” to sell a policy, than it has to be an even better investment for you to keep the coverage for your family. You don’t need to come up with a large deposit to keep the policy like the company purchasing your policy does. But then again, there are many other considerations that go into deciding whether to keep a policy in effect or not other than the “investment value” of your particular policy. If you can’t afford the coverage or have better use for the value while you are alive then the alternative of paying a policy to death might not be relevant.

Many people believe that their old policies are worthless or that their existing insurance is so old that it could not be improved. Many policy owners sell their old policies and/or purchase new coverage at much lower premiums.

The bottom line is that there are few reasons to settle for the cash surrender value of an insurance policy or allowing policy to lapse without value when it may be worth so much more. A professional life insurance agent can help you decide whether to sell, surrender, keep or replace your old insurance policy at a profit.