Can’t Afford Your Life Insurance Premiums? How to Turn Your Policy into Cash Now

Life Settlements

:: by Karl Edmunds ::

An unprecedented number of seniors are facing the possibility of letting their life insurance policies lapse.  These are policies they have been paying on for many years.

Over the years, many seniors may have planned to keep a target level of life insurance essentially until they die leaving tax free cash for estate taxes, and to meet the future needs of children and grand children.

Unfortunately the economics crisis over the past couple of years has forced many senior to radically revise their personal financial strategy and begin to examine creative ways to pay bills, get needed cash for unexpected medical expenses and meet current debt obligations. Or some have simply decided to enjoy life now or invest in a new business opportunity and need cash to do it.

The following are key questions and issues every senior should consider as you examine your personal situation and various options in managing life insurance assets.

Are you qualified to sell a policy?

First, the strategy to sell an existing life insurance policy by an older, but healthy senior is called a “life settlement”.

In today’s market, most buyers completely disregard policies that have a face value less than $100,000.  If you have a policy larger than $100,000 the next parameter is your age. Since the purchase price of a policy is essentially dealing with the time value of money, the best candidates are usually 65 years or older at a minimum.  And health plays a key role in the buyer’s decision process because someone that is expected to live 15 more years is much more uncertain to the buyer than a person who is 76 with a life expectancy of only 7-8 years due to poor health.

If you are faced with a terminal illness, you still have options.  And in many cases you may get a higher price for your policy than otherwise because your life expectancy is much more time certain.  For terminally ill people seeking to sell a life insurance policy to cover medical costs and other extraordinary living conditions, the sale of a policy is called a “viatical”.

What types of policies can be sold?

There is a strong marketplace of buyers that will accept a wide range of life insurance policies including Whole Life, Convertible Term, Variable and other variations of these. Provided the policy is written for an individual and it is convertible, it will likely qualify for a life settlement.
About the Author
For more than 20 years, Karl Edmunds has been a noted author within the business and management consulting arena. As a senior, he now engages his curiosity and observations about life to write about key issues of importance to the growing community of seniors (Boomers), and the value of living life to the fullest every single day. Give me your comments and suggests at http://SeniorRetirementTrends.org