Understanding Your Life Insurance Policy's Value on the Secondary Market

Green Settlements Staff

Many life insurance policyholders reach a point when they no longer wish to maintain their policy. There are often several factors that influence a person’s decision to sell their policy and pursue other options. For example, lots of people find it difficult to afford their monthly or annual premiums, especially if those payments increase over time. In other cases, a policyholder may lose a spouse or family member who’d been designated as the beneficiary on their policy, leaving no one to collect the death benefit.

Regardless of why you might consider ditching your life insurance policy, it’s important to know you have options. One simple way to secure extra funds when you need them most is to explore the life settlement market.

Companies operating in the life settlement industry purchase life insurance policies from seniors aged 65 or older who own a policy with a face value of at least $100,000. When you transfer ownership of your life policy to one of these buyers, you collect a lump sum and the buyer assumes responsibility for paying your recurring premiums in order to keep the policy active. This means that in the end, as the new owner of your former policy, the life settlement provider will receive the survivor benefit.

For some policyholders, the concept of a life settlement can sound too good to be true. After all, modern consumers have become targets of countless advertisements and marketing campaigns that often contain misleading fine print or false promises. But unlike other transactions that might pose certain financial risks to consumers, life settlements present an opportunity that allows both life policy buyers and sellers to profit.

Life settlement buyers purchase life policies, which are considered marketable investment assets just like your home or car. If you decide it’s time to sell, these investors take over your policy to ensure the money you put into it over the span of several years doesn’t go to waste. As a policyholder, you benefit from the cash payout you’ll receive in exchange for your policy, and the life settlement investor benefits by ultimately becoming the recipient of the death benefit.

When you consider your other options, which include letting the policy lapse or surrendering it back to the insurance carrier, a life settlement can be a simple way to unlock hidden value you wouldn’t otherwise receive from your unwanted policy. In fact, the vast majority of all life policies are abandoned or surrendered to the insurance company for pennies on the dollar, presenting a scenario where the only party to benefit from the transaction is your insurance carrier.

Life settlements can alleviate the burden of monthly premiums while also allowing you to reap the rewards of a policy you invested in for years. If you need money to pay for medical care, assisted living, or even to pad out your retirement savings, a life settlement can provide you and your family with much-needed financial stability.

To find out if your policy qualifies, apply now to get an easy, no-obligation quote.

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