Life insurance policies are usually purchased to provide financial support to the beneficiaries of the policyholder after their death. However, some people may want to sell their life insurance policies for cash on the secondary market. This is typically done through a life settlement broker who helps find a buyer for the policy. Let’s take a closer look at who buys term life insurance policies.
|Type of Insurance Policy||Can it be Sold?|
|Term Life||Yes, if it is convertible to permanent life insurance|
|Indexed Universal Life||Yes|
|Variable Universal Life||Yes|
|Government-Issued and Employer-Provided Life Insurance||No|
To sell a life insurance policy, the policy must be in good standing and have a death benefit. People sell their life insurance policies for various reasons, including a need for cash or no longer needing the coverage. The amount of money received from selling a policy depends on factors such as the death benefit, age, and health of the insured. Generally, policyholders can expect to receive between 50% and 75% of the policy’s death benefit, while the remaining amount goes to the buyer for their commission.
Policyholders interested in selling their life insurance policies should research potential buyers to ensure they are reputable and willing to pay a fair price for the policy. People can find buyers through online marketplaces or by contacting life settlement companies directly. It is important to understand all the terms of the sale and be aware of the fees that buyers may charge.
While selling a life insurance policy can provide extra cash, it is important to remember that the policyholder will no longer have coverage, and if they die after selling the policy, their beneficiaries will not receive any money from the policy.
- Forbes. Term Life Insurance: What It Is, Different Types, Pros And ...
- NerdWallet. Life Insurance: What It Is, How It Works, And How To Buy A ...
- Progressive. Buying Life Insurance - Illinois Department Of Insurance
- Insurance.com. What Is Term Life Insurance?
- Massachusetts Mutual Life Insurance Company. Life Insurance