by Mark Bradshaw

Can you sell unwanted life insurance policies for cash? Well, some people can, and this has become a popular option for older people with some policies they do not want any more.

The person or company who purchases life insurance will then be the new beneficiary so they can collect the death benefit. They also will have to pay any premiums that are still due. The old owner will get a cash settlement, and so they do not have to wait for the insured person to pass away to get paid.

This can be an attractive option for many senior citizens who need money to live on, and are not as concerned about heirs who would get a death benefit later.

People used to have few options when they wanted to get rid of their life insurance. One option was to just stop paying so the policy would lapse. They may have been able to surrender it to the original insurer for a small cash value.

A better option, for people who qualify, is to find a life settlement.

Who gets to consider life settlements?

Most of the time, the insured person must be at least 70 years old, though someimes a younger person will be considered.

What Kinds of Policies Will Qualify?

The life insurance policy must be whole or universal life insurance because that is permanent. Term may work with a guaranteed convertible rider.

People with term life shold make a deal when there is still quite a bit of time left on their policy.

Should seniors consider this?

Not everybody will want to sell their life insurance, but some people can really benefit.

You need to understand that the beneficiaries will give up any future death benefit. This really only works if those benefiaries are in agreement.

Life settlements are also considered by businesses. The company may have covered an owner or key man who does not work for them any more. They can use the policy to raise money, rather than paying a premium on a person who does not work with them any more.

How much are these policies worth?

The actual amount will depend upon the death benefit, age of insured, and other factors. But I have seen offers of 1/3, 1/2, or even more of the death benefit. Since the market is now competitive, qualified policies may be able to generate multiple offers.

How can a person find out more?

If you think a life settlement will help you, consult a life settlement broker. These professionals can advise you, and they can help you find investors to make offers.

Nobody can tell you which decision you should make. That is up to the policy owner, insured person, and the other beneficiaries. But if this is an option for you, it is good to know about it.

About the Author:
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