Converting An Unwanted Life Insurance Policy Into Ca$h

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Author: Afra AmirSanjari

Article source: http://www.1stop-lifeinsurance.com/. Used with author's permission.

Do You Own A Life Insurance Policy That You No longer Need or Want? It is possible that you may be able to can get a CASH settlement in excess of the current cash surrender value by selling your policy in the secondary market to an investor.

Reasons To "Sell" A Policy:

Family Situations
Bankruptcy
Estate Reduction
Estate Tax Revision
Business Was Sold
1035 Exchange
Drain On Income
Divorce - Separation
Death of A Spouse
Retirement
Declining Health
Non-Performing Policy
Wealth Planning
Work Related Changes

Qualifying Types Of Life Insurance:

Group
Whole Life
Term (Convertible)
Joint
Universal
Variable
Key Man (business related)

Who Is A Qualified Candidate?

Mature men and women over age sixty-five years of age who have an existing life insurance policy and whose circumstances have changed since purchasing the policy originally may qualify for a purchase and sale of their policy. Financial advisors view this as a powerful and innovative wealth and estate planning tool.

How Much Is A Policy Worth?

There are a number of variables that determine the offered amount for a policy, including the following;

* Age (of course) * Premium cost
* Client's Health * Type of Insurance
* Death Benefit * Insurer Rating
* State of Residence *Underwriting criteria

Note: As a general rule the most heavily weighted items are the age of the insured (the younger a person is a lesser current value will apply), the health condition, and the amount of the premiums that apply are the primary determinants in arriving at the price offered for a policy.

What benefits are there for the insured?

First - there is absolutely no cost for a policy appraisal
Offers liquidity to clients
Eliminates the insured having to pay premiums
Funding for 'Alternative' products that fit current needs
Offers an innovative and better solution for current status
Provides another alternative for divesting policies that are no longer needed or wanted. (As opposed to letting policies lapse or accepting the cash surrender value established by the originating life insurance company.)

How Does selling A Policy Work?

1. Policy owner (or professional financial advisor) requests and authorizes a policy evaluation.

2. Policy buyer obtains needed documentation, including policy information and physician statements, etc.

The highest possible offer is obtained in the secondary market.
The offer is submitted to the insured for acceptance.
If accepted, a contract is sent for signatures.
The change of ownership is completed and funds are released to the previous owner (usually the insured).

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