A life insurance policy is a significant investment that will affect the life of your loved ones once you die. There are many forms of life insurance policies depending on the issuing company.
You can take out a life insurance policy at any point in your life. In most cases, the life insurance will run up until your death or when you stop paying the premiums.
However, there is now a secondary market where life insurance policies can be sold as an asset just like a stock or bond. The question to ask yourself is if it is a good time for you to sell your insurance policy.
The following are times when it might be a good idea to sell your life insurance policy:
1. Critical Sickness
Life is full of unforeseen circumstances. You may decide to take up a life insurance policy only to fall critically ill. In such a case, you may decide to sell your life insurance policy. Most life insurance policies will have an early death benefit clause as part of the deal. It is the benefits that accrue to the beneficiaries of the policies upon your death. However, you have to die early to trigger the benefits.
If you are critically ill and you cannot get access to the early death benefits, you may decide to sell your policy. You may also decide to sell the policy if the early death benefits are less than what you can get for the policy.
You can then use the proceeds to get another policy or bestow it directly to the intended beneficiaries. The proceeds can also be used to address your ailment.
2. Chronic Sickness
Chronic sickness refers to a disease that plagues you for a long time. If you suffer from a long-term condition, you may decide to sell your policy.
The proceeds of the policy can then be used to pay for long-term healthcare which might be necessary. You can then choose another policy when you recover or if you think you might die soon.
There may be an event in your life that triggers selling your policy to pay for someone else’s long-term care. It may be a car accident or the onset of chronic disease.
3. Fund Your Retirement
It is no secret any longer that there are many people retiring from the workforce without enough to live on for the remainder of their days. A solution to such a conundrum would be to sell your life insurance policy on the secondary market.
You will need to calculate the full value of your insurance policy in order to make an informed decision. The professionals behind QLife Settlements recommend using a life settlement calculator to help you out. In this way, you will get an estimated value of the proceeds you can get from selling your policy. How much does Medicare cost per month?
If you bought the insurance policy when you were much younger and had retirement plans that were obliterated for some reason, proceeds from the sale of the policy can prove to be very helpful.
4. Inability to Pay Premiums
Your life insurance policy is only active as long as you can make the premium payments. If you are unable to make the payments, then you risk losing the policy and the benefits that come along with it. Therefore, if for some reason you are unable to pay the premiums of your life insurance policy, you may decide to sell it. You can then leave it to the new owner of the policy to handle the premiums.
Depending on the value of the policy, you should try as much as possible to come up with the premiums. You can use the proceeds to get another policy with fewer premiums but similar benefits.
5. You No Longer Need Life Insurance
Life insurance is primarily for the benefit of your dependents and not you. The benefits are usually triggered upon your death.
If it happens that your dependents are successful or you no longer have to give them the benefits of life insurance, you may decide to sell your life insurance policy.
There are many other reasons why you may no longer need life insurance such as a falling out with the beneficiaries. Selling your life insurance policy will give you a sufficient shortfall to do with as you wish for example fund your retirement.
Selling your life insurance policy is a situation that you should consider very seriously. The five points above are a fraction of the reasons why you might sell your life insurance policy. It is up to you to decide whether the benefits of the sale are larger than those of having the policy. As long as they are, you should feel free to sell the policy.
