Why You Should Consider Selling Your Life Insurance Policy
For many Americans, life insurance policies provide both beneficiary income and valuable peace of mind. In fact, the United States was the leading life insurance premium writing country in 2017, meaning that countless people were all too willing to pay a monthly premium in exchange for financial support for their loved ones after their death. That is backed up by recent data that shows that approximately 60 percent of Americans were covered by life insurance of some kind in 2018.
A new study revealed that 84 percent of US residents believe that most people require life insurance, but is that widely held conception actually true? Although many Americans feel that having a life insurance policy will prove necessary in order to provide for their families after they’re gone, there are certain instances where it may actually be better to sell your life insurance policy. However, is this even possible? And if so, why should you consider doing it?
Can you sell your life insurance policy?
Companies like Sell My Life Insurance Policy can help those interested in selling their policy because they are in need of funds. When you embark on this process, you will typically sell your policy to an investor or other buyer. This person or entity will then become the owner of your policy, paying for the premiums each month and receiving the benefit after your death.
If you choose to sell your life insurance policy, keep in mind that you will not be able to receive the policy’s face value (i.e., the death benefit amount). That said, selling your insurance policy may allow you to receive more money than if you were to outright cancel your policy. That makes this option an attractive one, especially for many seniors with larger policies.
Good reasons to sell your life insurance policy
Selling your policy can be financially advantageous under the right circumstances. While it’s important for each individual policyholder to evaluate their options, you may want to consider selling your life insurance policy if:
You can no longer afford the premiums
Life insurance payments are no small problem. For those who are retired or whose financial situations have recently changed, premiums can represent an undue burden. You might pay anywhere from $150 to $3,000 per year for life insurance, depending on the circumstances. If you are unable to pay for your policy, selling it can alleviate monetary stress and make it so you have one less payment to worry about.
You no longer have any dependents
People may also choose to sell their life insurance when the coverage is no longer needed. If you no longer have any loved ones for whom to provide, for example, a life insurance policy will likely represent a substantial waste of money. For example, policyholders who have been through a divorce or whose spouses have long since passed may want to consider this option, as may others whose children are financially independent. Since no one will require financial support after your death, you can use the money you obtain from selling your policy to make your life more comfortable and to plan ahead for any end-of-life expenses without having to pay a premium each month.
You require a bigger retirement cushion
Recent data shows that most families have little to no retirement savings at all. These statistics are scary, but that doesn’t mean you have to accept this fate for yourself. If you recently learned that the amount you’ve managed to put away for your retirement is nowhere near the amount you’ll actually need, you may find some financial relief by selling your policy. It’s not uncommon for individuals to fund at least some of their retirement by selling these policies, particularly if you have too much coverage and the premiums are too high.
You are chronically ill
Some life insurance policies do not offer the option for policyholders to access their death benefits early, even in the event that the policyholder is chronically or critically ill. And if they do offer this option, the benefit may actually be less than what you might receive by selling your policy. In many cases, it may behoove the policyholder and his or her family to explore the idea of selling the policy. This can allow you to afford the care you need, especially if you are already retired.
In several scenarios, having a life insurance policy can provide financial security and emotional comfort. However, that’s not always the case. In fact, life insurance premiums can sometimes cause more stress than they alleviate. If that’s true for you, you may want to explore your options for finding economic relief and potentially think about selling your policy.