Retirement isn’t always what it’s cracked up to be. Sometimes life throws you a curveball and sends your piggy bank crashing to the ground. After faithfully saving money for many years, many seniors are not happy with where they have found themselves in life, usually due to unexpected expenses such as medical bills or emergencies. Others were simply not diligent enough to save enough money for retirement at all.
There is no shame either way. Millions of young people who are currently living paycheck to paycheck and are unable to save for their senior years means that the likelihood of saving enough money for their future is relatively slim.
The bottom line is that you never know what life will bring, especially regarding your health and how it may affect your financial stability.
The good news is that if you have a life insurance policy, there is something you can do to turn the tables in your favor. As it turns out, your life insurance policy could be one of the most valuable assets you own. Based on your age, health, premiums, and type of policy you have, you may be able to sell your life insurance policy for cash.
What happens when you sell a life insurance policy?
So what does it mean when someone says they sold their life insurance policy? In summary, when you sell your life insurance policy to a licensed third party known as a life settlement provider, you essentially agree to sell your life insurance policy, including the associated death benefit.
When you sell your life insurance policy, the buyer will assume payments for the premiums until you pass away, at which time the buyer will receive the death benefit. The seller will benefit immediately from the sale of the policy as they receive a lump sum cash payout.
By selling your life insurance policy, you can free up a substantial amount of cash and use it for anything you wish. The process of selling a life insurance policy is referred to as a life settlement.
Things to know about selling a life insurance policy
As with any major transaction, there are some things that you should know about selling a life insurance policy. The first thing that you know is that it is relatively simple. The second thing you should know is that many seniors find that their quality of life has been dramatically improved since selling their life insurance policy through a life settlement.
Another thing that you should know is that while you will have to pay taxes on the profits from the sale, you will still make more money than surrendering the policy to the insurance company for the cash value. The amount of money you will have to pay in taxes for ordinary income and long-term capital gains is less than the amount you will have leftover. You should seek advice from a tax professional.
The best part is, you can use the money from your life settlement for literally anything you desire. No one can stop you from spending the money any way you choose.
Are you unhappy with where you are living? Are you tired of medical bills piling up and maybe need money to move to a nursing home or memory care facility? Want to be able to visit your grandchildren more often and be able to spoil them or travel? Then you should consider a life settlement.
Now that you are in your golden years, you should have the satisfaction of living wherever and however, you please.
How it works
So how does one go about selling a life insurance policy? You will be happy to know that selling a life insurance policy to a life settlement provider is a relatively simple process.
The policy owner transfers ownership of the policy to a licensed buyer “Provider” in return for a cash payment greater than the surrender value but less than the total death benefit. You’ll submit an application with basic information about the policy and the insured person to be evaluated by the life settlement provider.
- Information you will need to provide is:
State you live in
Type of life insurance policy you have (whole life, convertible term, or universal life)
The cash surrender value (accumulated cash value) of the policy
Amount of premium you pay per year.
The life settlement provider will walk you through the process. With the information provided, they can determine if you qualify and offer to purchase your life insurance policy.
1. Health questionnaire. You’ll most likely need to complete a health questionnaire.
2. Authorizations. The insured and the policy owner (if different from the insured) will need to provide authorization to the life settlement provider to contact the insurance company on your behalf and access your policy information and your doctors to get your medical records.
3. Insurance Policy Documents. You will need to provide a copy of the life insurance policy. If you don’t have copies available, the life settlement provider can request these documents from the insurance company with your authorization.
4. Evaluation. The life settlement provider will evaluate all the policy details and medical records to help determine your policy’s value.
5. Offer. With all the necessary information, the life settlement provider may make you a cash offer for the policy.
6. Closing. The closing process is the actual transfer of ownership of the policy to the provider with all the accompanying documentation. During closing, your settlement payment will be placed in escrow until your insurance company has verified the change of ownership. Once verified, the escrow agent releases the funds, and you receive your cash payout.
Companies like MRE Finance walk you through the process in more detail. The more you know ahead of time, the easier the process will be.
Is a life settlement worth it?
Now that you know more about how selling a life insurance policy works, you might be asking yourself if it would be worth it. The short answer to this question is yes! If you have a life insurance policy and are 65 or older or have a terminal illness (no matter your age), you stand to benefit from a life settlement.
Selling a life insurance policy is simple, and MRE Finance can help you find a suitable buyer for your policy which takes a lot of guesswork out of the entire process!
Get in touch with MRE Finance.
Ready to sell your life insurance policy? Then you are ready to get in touch with the professionals at MRE Finance. They are dedicated to helping seniors sell their life insurance policies. Life settlement transactions can seem complicated, but they don’t have to be.
MRE Finance makes it simple to execute a life settlement transaction because we believe in helping people who no longer need or have an unwanted life insurance policy.
Contact MRE Finance today and start your journey to financial freedom.
Click here to use our free life settlement calculator to find out the potential value of your life insurance policy. mrefinance.com/free-life-settlement-calculator/ or call us today at 1-800-521-0770.