Alternatives to Selling Your Life Insurance Policy

 

A Life Settlement can be very attractive way to tap into an asset that you own. However it is important to be aware of alternatives – we’ve compiled a short list of these alternatives in this chapter.

Consider them carefully before moving forward.

Accelerated Death Benefit

Your life insurance policy may offer an Accelerated Death Benefit (ADB). Also known as “Living Benefit”, this allows you to receive a portion of your death benefit from your insurance company. However, your insurer may have certain requirements for you to qualify – such as having to be terminally ill which usually implies a life expectancy that is less than two years.

Also note that you can’t stop paying your premiums even after receiving your ADB. You are still required to make your policy’s monthly payments while you receive portions of your benefits which will be considered as a loan you won’t have to repay. Accelerated Death Benefits will be deducted by the insurance company from your policy’s face value when you pass away.

 

Viatical Settlement

 Like a life settlement or an Accidental Death Benefit, it is meant for policy holders that are terminally ill – but unlike Accidental Death Benefit, you can receive a lump sum settlement upon the sale of your life insurance policy to a third party. And therefore you are no longer required to pay the monthly premiums. The buyer of your policy will take these payments.

Policy Cash Value / Death Benefit Loan

If you are a whole-life policyholder, you may tap into the cash value has built up in your policy over time. You can either borrow against your policy’s cash value or use it as collateral for secured loans. Borrowing against your policy’s cash value is called a Death Benefit Loan. When the death benefit becomes due, the loan amount, its interests and other fees will be subtracted from the full death benefits. Note however that you cannot take out as a loan more than the cash value of your policy, which is typically a small fraction of your benefit.

Policy Surrender Value

If you no intention of owning your policy any longer, you can cash it out based on for its surrender value. This amount is usually significantly lower than a life settlement.

Remember not to treat your life insurance policy as a long-term commitment that you need to pay rather than an investment that has the growth potential like any other property you invest in. Your policy is an investment, a convertible asset, and can be a significant part of your net worth.

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3 Ways To Get Cash Out Of Your Life Insurance Policy

 

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If you have a universal life insurance policy or a whole life insurance policy that you’d like to trade in or tap for cash, you’re in luck. These permanent life insurance policies are often designed and funded to borrow or get cash from. Before going any further, make sure you read the fine print of your policy and understand any fees, borrowing interest or charges which might be incurred.

There are several viable ways to go about this (including life settlements), depending on whether you want to keep the policy, how much time you have available to spend on the project, and the amount of money you’d like to access. Read more

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How to Sell Your Life Insurance Policy

 

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While purchasing a large life insurance policy in your 30’s was probably a wise move (especially if you were supporting a growing family) that big policy may not be such a great deal after the kids move out. You may no longer need assurances that the death benefit bestowed upon your family by your insurance company will be large enough to securely launch your children into adulthood. Maybe your nest egg isn’t as large or secure as you’d like, and adding a sizeable lump sum would allow you to more easily afford rising health care costs and travel more frequently. Read more

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What is a Life Insurance Buyout?

 

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Great question. A life insurance buyout is just another way of saying a a life settlement, which is the technical term for the process of selling your life insurance to a third-party investor if you no longer want or can afford it. A settlement a somewhat-simple transaction that pays the policy owner (you) an upfront cash payout, or a yearly payout. For this payout, you assign the policy to the buyer so that they own the policy and collect the death benefit at a future date when you pass away. 

Most people who pursue a life settlement do it if they have a life insurance policy which you no longer want, need or can afford. This article summarizes the important things you need to know about a life insurance buyout.

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When Should Seniors Consider a Life Settlement?

 

 

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Are you a senior considering a life settlement? It could be a great financial option for you and your family depending on the scenario. 

Whether or not you should consider a life settlement depends on your personal financial situation, goals, and needs. In general, a policyholder may consider selling their policy because their current financial situation does not warrant the need for a policy any longer. Below are some of the most common reasons why policyholders may abandon their policy.

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9 Reasons Why What You Think About Aging Matters

 

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Henry Ford supposedly said, “If you think you can’t—you can’t. If you think you can—you can.” While that statement usually applies to reaching our goals or persevering in spite of the odds, we seldom consider it in context with aging. Yet, growing research shows that our view of aging can have a dramatic effect on the quality of our health, happiness, and wellbeing. Not only does what we each think about aging matter, how we feel about aging as a society influences the experience that each of us will have as the years add up. Fortunately, if we can learn to identify those stereotypical prejudices most of us hold about aging, we can halt and maybe even reverse many of the negatives formerly believed to be our destiny.

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