Having Life insurance ensures that your loved ones will not face any trouble after your death. But there are times when you aren’t able to pay premiums of your Life insurance. You can sell your policy in case you are no longer interested in Life Insurance. According to experts, you could get up to 25 percent benefit of your policy in the sale. However, this process is not as easy as selling an ordinary item. Known as a life settlement, selling your life insurance policy takes 3 to 4 months. Through this process, the buyer pays premiums of the policy and gets the benefit when you die.
Before selling your insurance policy, it’s imperative to know the pros & cons of selling the policy.
Pros:
If you are running not of cash, it’s better to sell your policy than borrowing money from a bank. The selling option will also relieve you from paying your insurance premiums. Consult a financial advisor if you are not sure of the benefits of selling your life insurance policy. You will get money more than the cash surrender value but less than the death benefit on selling your life insurance policy. People above 65 years of age, will get more money from selling their insurance policy.
Cons:
Albeit selling your insurance policy has some benefits, it also comes with some downsides. For novices, getting a perfect buyer that will offer you a good price is a daunting task. Moreover, the requirements of selling the policy will also create hurdles in your selling process. The taxes & commission fees also come into the picture. They reduce the value of the policy by a whopping margin of 30 percent. This will not make it a meriting offer. Ergo, it’s vital to find a buyer that will offer you the most competent price.
Restoring The Process
If you have already sold your life insurance policy and are not convinced about your decision, you can take back your decision and restore your coverage. In some states, you are empowered to get your life insurance policy back, provided that within a particular time, you repay the settlement. Visit your state insurance department to get more details.
