Selling A Life Insurance Policy: What To Know

Selling a life insurance policy can be a lucrative option for many seniors. Whether you have outlived the need for a life insurance policy or need access to additional cash during retirement, you could be sitting on a virtual gold mine. Instead of simply surrendering the life insurance policy you paid into for years, you may be able to sell it for much more than the cash surrender value.

Seniors often use this additional money to live out a more comfortable retirement in their golden years, complete bucket list adventures, or help loved ones who may be starting a family.

Selling A Life Insurance Policy

Selling a life insurance policy is a simple and hassle-free experience. Nearly anyone can do it. There are special skills required, but investors are typically most interested in high-value insurance policies. Investment companies rarely purchase policies with a face value of less than $100k, but that isn’t always the case.

If you’ve considered selling a life insurance policy, then you should check into the process because there are some policies that investment companies are almost always interested in. If you’ve often wondered about selling a life insurance policy, click here to find out more. Here’s what you need to know in the meantime. You can click to find out more.

Preparing to Sell

Selling a life insurance policy can be a great experience that nets you the additional income you need for a loved one’s medical expense or for your retirement. While it can be a simple process, it may not always be as fast as you would like. Even if you are still learning about the process, getting prepared in advance can help speed up the process.

Whomever purchases your life insurance policy will most likely ask to view several years’ worth of your medical records. It’s standard in the industry. The request will likely include your primary care provider as well as any specialists you’ve seen in the last five years. Having the necessary information available can help speed up the process.

How Much to Expect

Each investment company is unique and has its own individual process for purchasing life insurance policies. Generally, you can expect to receive between 20 and 25 percent of a policy’s face value amount, but that can fluctuate. For instance, if the face value of your life insurance policy is $250k then you may net between $50k and $62k when you sell your policy. This generous amount can significantly increase your retirement nest egg.

Tax Implications

It may be wise to consider the tax implications when selling your life insurance policy. Some of the proceeds may be considered taxable income by the Internal Revenue Service (IRS). For instance, if your life insurance policy is considered part of your taxable estate, then selling it could reduce the size of your estate. This would also reduce the tax burden. Estates and taxes can be complicated, so it’s always best to work with a financial professional.

Consider Selling a Life Insurance Policy Today

If you’ve been holding on to a life insurance policy that is no longer a necessity, then you may want to consider selling it. While some people do surrender their life insurance policy, you can get a lot more money by selling it. Taking some time to prepare can help speed up the process if you need the money for something specific.

You can typically expect to receive about a quarter of the policy’s face value when you sell. Don’t forget to work with a financial expert who can help reduce your tax burden during the process. If you’ve considered selling a life insurance policy, it could get you the additional money you need.

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About the author

Sophia Britt

My name is Sophia and I live in the suburbs of Chicago. I offer real world experience to readers on how to save and smartly spend their money. Plus offer advice on organization, career, business, travel, health, home, education and life.

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