Selling Your Life Insurance Policy

It’s not uncommon for people to feel as though their life insurance policy is no longer a good fit.

Even if it is a good fit, it’s also not uncommon for people to find themselves in situations where they could urgently use more cash on hand.

Whatever your situation, you’ve found yourself looking into selling your life insurance policy. The good news is that you’ve come to the right place.

Read on to find out why.

Is Selling Your Life Insurance Policy A Good Option ?

First of all, it’s important to know whether or not selling your life insurance policy is even a good option to begin with. We wish we could answer this question with a simple yes or no, but like most things, the answer is: it depends.

Figuring out if it’s a good option for you, however, doesn’t have to be overly complicated. That said, we still recommend that you talk with your insurance agent or trusted financial advisor rather than just taking our word for it.

What we can say, is that most of the time, for most people, selling your policy will be a better option than canceling your policy.

Canceling your policy results in fees and charges which can greatly diminish the amount you get back. Not to mention the fact that having canceled a previous policy doesn’t look good to insurers should you apply for another policy later on.

What Selling Life Insurance Looks Like

To know if selling your life insurance policy is a good option for you, it’s important to have an understanding of what that process looks like.

Your life insurance policy is an “asset,” like your car, house, or television. While it’s not tangible, it is something that you can sell or transfer. It’s helpful to think of your policy in this way.

Your whole life policy is built out of two main components: the cash value and the death benefit.

The cash value of your policy builds up conservatively over time, and can be used as collateral for a loan, or even to supplement your retirement income. This feature is unique to whole life policies.

Then there’s the death benefit, which is typically the main reason why people purchase a life insurance policy to begin with. The death benefit is the amount of money given to your beneficiaries (tax free!) upon your passing.

When you sell your life insurance policy, you are essentially selling the rights to your death benefit. When a buyer and seller agree on a price, the buyer of the policy also takes over paying the premiums in order to keep the policy going. The buyer receives their “return on investment” by receiving the seller’s death benefit when they (the seller) pass away.

Additionally, most investors and life settlement groups will only purchase the life insurance policies of those with short life expectancies, which is an extremely small fraction of the number of whole life policies that are surrendered.

For those who are able to qualify for a traditional life settlement, in some cases, a “Retained Death Benefit Settlement” is available.

In this scenario, the seller is able to keep a portion of the death benefit for their beneficiaries. Unfortunately, this means that they are paid far less for the policy than if they surrendered the entire death benefit to the buyer.

What about people who don’t qualify for a traditional life settlement? Are they just out of luck, then? No! In fact, these are the exact people that we are looking for…

How Should I Sell My Life Insurance?

If you don’t qualify for a traditional life settlement, but need to sell your life insurance, this is for you.

Remember, there are two aspects of your whole life policy: the cash value and the death benefit. As we’ve explained, the traditional life settlement route is focused on making money by receiving the death benefits of those policies they purchase.

Aspen Life Settlements is different. We actually use the cash value feature of policies as a place to safely and conservatively invest our money. That’s how we make a profit (NOT from receiving your death benefit). The most important part of this for you is that we pass on the difference.

When you sell your whole life insurance policy to Aspen Life Settlements, we pay you about the same amount you would receive by canceling your policy, and you get to keep your death benefit!

What does this mean? Well, it means that you can successfully sell your policy and have the cash on hand that you need–while maintaining coverage and keeping your death benefit available to your beneficiaries.

This is a compelling, life-changing option for those looking to sell their life insurance policy, but either can’t qualify for a traditional settlement, or just want to be able to keep their death benefit.

We encourage you to strongly consider Aspen Life Settlements. Get in touch, ask your questions, and figure out what is best for you.

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