Should You Sell Your Life Insurance Policy?

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What are the regulations about disclosing to the purchaser of some-one elses life policy the whereabouts of the previous owner?

Elizabeth Snell 8:06AM May 03, 2013

In order to maximize the value of a life insurance policy, you need to solicit multiple competitive bids. Using an experienced broker will simplify this process for you.
Lump sum cash offers are the most common, but not the only option for those who qualify. The good news is that you can have your policy appraised for free: http://www.settlementbenefits.com/wordpress/policy-evaluation

Adam Lippman of FL 12:57PM October 18, 2012

I have a term life insurance policy that I would like to use as collateral. I need to find a lender to loan me some cash to get out of debt and keep my head above water. Do you have any names of these types of lenders?

Mike of CA 12:31AM June 28, 2011

Seniors can sell their life insurance policies with a trusted company like Advanco Life Settlements. Find out how at http://www.advancolifesettlement.com

Frank Gray of TX 12:15PM June 15, 2011

Hey
My husband, 34 and I, 30 are searching into life insurance. Can anyone inform me which company or sites We can use for getting details. There are lots of around... wouldnt know where to start. Who do you personally use? Is there a health check required? Exactly what sort of premiums are you paying? Is it fixed or will it increase every couple of years? We live in Florida also. Any help would be appriciated.

Permanent Life Insurance of AL 5:19AM February 08, 2011

Stacey, you're right about the licensing requirement in those states which life settlement regs - but why are none of the banks or credit unions stepping up to the plate, especially if they had access to TARP funding?
Vysta, you should check to see if you can convert your policy to permanent insurance. If you can and depending on your age, you should contact www.earlyls.com in Chicago and see what they can do for you. If you need a hand you can contact me at 416-782 8766 as I just arranged a similar case through them.

daniel kahan 9:13PM January 26, 2011

I AM INTERESTED IN SELLING ONE OF MY LIFE INSURANCE POLICIES, HOW DO I GO ABOUT IT. WE COULD SURE USE THE MONEY, AND WE WILL PROBABLY OUT LIVE THE TERM IT IS A FIFTEEN YEAR POLICY. WE WILL LOSE THE MONEY IF WE CANNOT SELL IT. CAN YOU HELP ME.

VYSTA ANNE OWEN of TX 11:38AM January 26, 2011

Mr. Kahan rightly points out the tax benefits of a loan instead of a life settlement. But remember, a loan issued by a life settlement provider is still a life settlement transaction requiring the same licensure and other regulatory compliance as a settlement. In fact, many statutes include the word 'loan' in their definition of a life settlement.
Loans that would not merely be a form of life settlement would be loans from the insurance carrier that issued the policy (policy loans) or bank loans using the policy as collateral.

Stacy Braverman of IL 7:07AM January 26, 2011

Unless the policyholder or his family have NO need for the future proceeds, it would make more "economic" sense for them to try and obtain a loan to either pay the future premiums or borrow against the market value of their life policy which is an increasing asset.From a tax perspective a loan is tax neutral whereas a life seetlement is taxable to the policyholder and eventually to the investor unless they are a pension fund or charity.

Daniel Kahan ASA 7:32PM January 22, 2011

Most people buy life insurance for the wrong reason and pay too much for it. Life insurance is not an investment. It's not a prepaid expense for end of life expenses. It's not a budgeted expense to leave something to your heirs. It is only a payment of a lump sum to your dependents in the event that you (the breadwinner) die, so that they can invest it safely and draw out your take home pay. This amount is needed until they are no longer beneficiaries. Most young people are under-insured and leave their dependents at risk. The reason is often that they bought some sort of cash value or whole life insurance from an agent who is paid a large commission on the sale. So they get something like one year's gross salary when in reality they need something like 5x - 10x. This amount of coverage is only affordable through term life. The insurance companies will cry about the profitability of term insurance, but don't believe them - the majority of these policies expire without claims being made. Just look at organizations such as CPA groups that self insure and you'll see that they regularly return money to their insured. That's the profits that would have gone into the pockets of insurance companies. This is not a slam on insurers; they provide a necessary service in two products - one of them affordable and the other much less so.
So, older people who have accumulated significant cash value in unnecessary insurance policies have a valuable asset that they should use for their current needs or even for their current pleasures in the time they have left. Their assets are for their own care and the insurance industry should do what it can to make a transparent, low-cost market for the sale of such policies to investors. Everyone would benefit: investors would get low risk opportunities to earn a decent return, the unnecessarily insured would get to use the pent up value in their policies, and the insurance products themselves would become more attractive because of this added feature.

Stephen Campisi of CT 7:50PM January 21, 2011