In the United States, most, if not all, of Americans consider their life and death. To be more specific, they spend some time thinking about what will happen to their family, their belongings, and their assets once they pass on. Many individuals purchase a life insurance policy. By definition, a life insurance policy is a contract between your insurance company and yourself; this contract is more-so an exchange. Essentially, you make payments, and then once you pass away, your insurance company will provide your family members with a monetary element. Most of the time, this is a lump sum of cash. Although this sounds ideal in theory, people have been questioning if a life insurance policy is necessary. After all, around 86% of life insurance policies will lapse without any benefit of being paid and many policy death benefits are never actually disbursed. Because of this, it may be wise to consider selling your life insurance policy. If you’re curious about life insurance settlement options, and settling your life insurance policy, here is what you need to know.
Why: Settling Your Life Insurance Policy
Many Americans purchase their life insurance when they are younger; typically around 30 to 40 years of age. Around this time, individuals think they’re making the correct choice for their life situation. However, life changes constantly, and by the time individuals are around 60 to 70 years of age, they come to a realization. They realize that they do not need their life insurance policy. There are many reasons for this.
Cannot Afford Premiums: The agreement between your insurance company and yourself requires that you make payments on your premiums. However, if you begin to run low and cash and cannot afford to pay these any longer, it is ideal that you think about life insurance settlements. Settling your life insurance means that you’ll sell your life insurance to a life insurance settlement company; there will be more of this later on.
Family Members: Many people purchase life insurance with their family members in mind. You do not want your family members to struggle financially when you pass away. So, your life insurance is similar to a gift for your family members. They will be financially secure with your policy. However, if your family members become financially secure and independent before you pass away, you’ll want to consider settling your life insurance policy. This is because your family members will not need your life insurance policy or the benefits that come with it.
Therefore, it is important to consider why you bought your insurance policy, if you can make payments, and if people will benefit from it.
How: Settling Your Life Insurance Policy
There are actually many life insurance settlement companies that will take your life insurance policy. These companies are typically brokers or actual settlement providers. The process of settling your life insurance policy is pretty simple, and not very confusing or long.
Step One: First, you should find the best company for your situation and your type of life insurance policy, because there are many life insurance policies. Once you find the ideal company, they will purchase your life insurance policy from you. This means that they will make the payments on your premiums for you. They also receive all the benefits from your death. It works for them, but it also works for you, too!
Step Two: This is where settling your life insurance policy works for you. Once the company purchases your life insurance policy, you will get a lump sum of cash in return! The company will typically go off of where your policy is currently, and how much it will be once you pass away. Many individuals have seen positive results. For example, some received up to $200,000 in cash! If you want to take a trip, experience new things in life, before you pass away, this is very ideal!
Step Three: Sometimes you will have to remain in contact with the insurance company. Some companies will check in on your medical history, conditions, and how you are thriving. Although it sounds bad, companies are waiting to receive benefits from your death.