Mark Greene
The thought of selling your life insurance policy might make you a little uneasy, but it can be a good way to get some extra cash and liquidate some of your assets. This is known as a life settlement, although it can be tricky to do so, especially since the regulations can vary depending on your area. And the amount you might get can vary as well.
Selling a Policy
There are many life settlement options, but it simply means you are selling the policy to receive a cash payment. Then you will no longer have coverage under that policy. Sometimes, an investor will purchase the policy and place it in their portfolio. Regardless of the purchaser, you can estimate the value of your own policy in seconds to determine how much you might get from the settlement.
You will most likely need to look for a company offering life settlements or a broker. These are middlemen, and they can find a purchaser for you. Of course, there is a fee for these services, so you might not get the entire value. There are a few things you will need to know before you can successfully sell your coverage so you can maximize what you get.
Do Your Research
The process can be complicated, so even if you are dealing with a company or broker, you will still want to have some understanding of what is going on. knowing what to expect and how it works will help you avoid common mistakes. Understand the amount of coverage you have and the policy type. You should also see how much cash value you have, and ensure you understand the regulations and rules surrounding the sale of coverage in your area.
Consider Working with a Professional
You might want to turn to a professional advisor who is more of an expert on these settlements. They can then asses the value of the policy. An independent advisor can appraise the value and let you know about anything that might add more value. And you can get a recommendation on a broker from an advisor. If you have other questions on the process, an independent advisor will get you the answers you need.
It is equally important to work with a broker who is reputable. You might want to find multiple one and interview each before making your decision. Ask them how they improve the offers you’ll get and see how the commission’s work. Remember, the transaction fees might start to eat into your profits, so if you don’t do your research, you might end up with much less than you were expecting.
Get Several Offers
It is best to get a few different offers, each of which can vary quite a bit. Don’t grab the first bid you receive, since that might not be high enough. Don’t be afraid to spend a bit of time on the process and wait for the best offer to come your way. If you know you will need the money by a certain time, start the process of selling relatively early.
