Most people assume that a life insurance policy only pays out a settlement when the policyholder dies. Then again, most people in Western cultures don’t talk about death and are even less likely to plan for it. Nevertheless, you can use your life insurance in many ways whilst you’re still alive. The best part is that these don’t just involve knowing how to sell life insurance policy.
5 Ways to Use and Sell Life Insurance Policy
Depending on your current circumstances and health, you might need cash and sometimes life settlements are the only option. The good news is that you can easily tap into the cash value of your policy without necessarily having to sell life insurance policy, as described below:
Loans
Borrowing money and using the cash value of your policy as a collateral is a very common approach when trying to work out what to do with your universal life insurance. You can even borrow up to 90% of the cash value which could be in the tens of thousands or even millions of dollars. Some companies will only allow you to borrow up to the accumulated cash value though so it’s worth checking the rules. Although you should also note that this will impact the final death benefit payout.
Withdrawals
Some life insurance policies allow you to make withdrawals by adjusting your policy terms. Again, this assumes that you have accumulated some cash payments. Either way, it’s worth talking to your policy provider to see what’s possible before you even consider selling a life insurance policy. You might be surprised at how useful it is for you and your family today.
Surrender
Sadly, there’s still a lot of unknowns around life insurance. This means that when people find themselves unable to pay the premiums, they simply cancel without knowing what other options they have. Of course, surrounding your policy might be what’s best for you and your situation. If that’s the case then it essentially means that you cancel the policy with your provider. They then release all the cash value at that moment in time. Although, bear in mind that this is always going to be less than if you choose to sell life insurance policy.
Apply for Living Benefits
Depending on your policy, you could be eligible for a cash payout of up to 50% of the death payout if you meet certain criteria. These usually include chronic or terminal illnesses or even the need for long-term special care. Again, this could be the extra helping hand you need before deciding to sell a life insurance policy.
Sell Life Insurance Policy
Once you’ve explored all the other options, then a viable option might be to sell your life insurance. Of course, you should consider how this might impact your family. Either way, it’s a better strategy than surrounding your policy. The idea is that you sell your final death payout for a sum less than that but greater than your surrender value. You’ll have to work with a broker to negotiate the deal with a life settlement company that specializes in buying these types of insurances.
Getting Expert Advice
The above options can all be reviewed with your life insurance company except the last one. When it comes to actually selling your policy, you’ll want to consider the following key points:
- Find a reputable broker
- Explore the process
- Review your current policy options
Find a Reputable Broker
As you do your research you’ll soon discover that there are life settlement agencies, companies and brokers. In some cases, you can deal directly with the company. Having said that, a broker can usually provide insightful and unbiased expert advice.
Explore the Process
Some companies offer expedited processes and others promote how easy their processes are. If you’re not sure where to start though then look for some ‘best of’ lists. It’s then wise to cross-check any company names with Better Business Bureau or BBB. This nonprofit rates such companies to give you the reassurance and peace of mind that you need.
Review your Current Policy Options
Let’s not forget to include your policy company in your investigations. At the end of the day, their job is also to advise you and help you through any life changes. Most insurance companies have evolved into putting the customer first and should be in a position to want to help you.
