Sometimes, when you need extra cash, it can take a bit of creative thinking to determine how to come up with it. This may be especially true if you are past retirement age and do not have the desire or the ability to work again. If you are over the age of 70 and have a life insurance policy that you no longer need, with a value of $100,000 or more, you may have the option to sell your life insurance policy for cash. Perhaps you have already given this option consideration, but want to weigh the pros and cons first. To assist you in the process, we have designed a list highlighting the pros and cons of a life settlement.
How You Benefit from a Life Settlement
If your budget is a bit tight each month because of your life insurance premium, selling it will eliminate the payment obligation. The buyer of your policy, typically a life settlement company that is partnered with Sell My Life Insurance Policy, becomes the new owner of the policy and takes over the premium payments. This frees up space in your budget to meet your living expenses each month without the stress of trying to juggle payments or live on less than what you need.
When you sell your life insurance policy you receive cash for your policy after policy ownership changes are complete. This also puts more money into your budget since you receive a lump sum payment to use as you wish. Since the need for quality medical care often increases with age, having an extra cushion available to meet these expenses can provide you with valuable peace of mind.
However, that is not to say that you need to spend the money only on medical care or living expenses. You alone decide how to spend it, which means you may finally have the funds for that long-awaited cruise vacation. After all, you have earned the right to fully enjoy your retirement years.
Perhaps you have multiple life insurance policies and only need one. Another possibility is that your primary beneficiary has reached the point of financial independence. Many people allow their life insurance policies to lapse in either type of situation. Unfortunately, you receive no financial benefit for having faithfully paid your premiums all these years if you lapse. Selling an unwanted policy for cash is much better than allowing your policy to lapse and receive nothing.
At Sell My Life Insurance Policy, you are connected with our network of life settlement companies interested in purchasing life insurance policies like yours. Once you receive and accept an offer, you can use the money to pay off debt and live a life of financial independence in your retirement. As with establishing a savings account, paying off debt that you have carried for years can be very liberating and take away the financial stress in your life.
Possible Cons of a Life Settlement
Every large financial transaction has potential benefits and drawbacks to consider before going through with it.
One thing to bear in mind when you sell a life insurance policy is that, although rare, a life settlement may disqualify you from applying for a new policy in the future. However, if your heirs are financially independent, it is unlikely that you would need to buy a new policy in the future.
It is also important that you give careful consideration to that fact that when you sell your life insurance policy through a life settlement, the life settlement company purchasing your policy becomes the new beneficiary. If you have concerns about this, you can find peace of mind in knowing that some life settlement companies offer an option called a back-end agreement when you agree to sell your policy. A back-end agreement allows you the option to leave a portion of the policy intact for a beneficiary of choice.
Alternatively, you can put some money from your payout into a trust to ensure that your heirs have money available to them. In such instances, you would let your beneficiary know that the arrangement has changed but the fact that he or she will receive funds later has not.
You could also use the funds from selling your policy to pay off certain items for your beneficiaries such as their home, outstanding debt, or other items. This allows you control over how the money is spent and they can enjoy this freedom sooner rather than later.
Finding a company interested in a life settlement agreement and then closing the sale can be a time consuming process. However, Sell My Life Insurance Policy simplifies the process, reduces paperwork, and speeds up the time until you receive your settlement check. These are some of the biggest benefits of working with a referral company instead of conducting your own research and contacting each potential buyer individually.
See if You Qualify to Sell Your Life Insurance Policy Today
Now that you have reviewed the benefits and potential drawbacks of selling your life insurance policy, we invite you to see if you qualify for a life settlement with our simple 2-step form. We will connect you with our large buyer network and they’ll be in touch with your individualized offers.