No, we are not misleading you. You must have heard about life insurance buyout. If not, it is a process that involves selling your life insurance policy for a lump sum amount to a settlement company. If you have never heard of this option, you are not alone.
Statistics indicate that a large number of life insurance policyholder’s insurance benefits lapse. These amount to an average of $140 billion per year. This is largely due to misinformation. However, if you play your cards right, there is probably a good chance that you will be able to reach a life insurance buyout deal. So, what exactly does this mean?
Get money for your unused life insurance policy
This means that you can get a good sum for your unutilized life insurance policy. Various settlement companies affiliated with the government purchase life insurance policies from people who are willing to sell.
Although the procedures remain the same, the valuation of your policy varies from state to state and company to company. But, if you are lucky and have a great track record, you might be able to receive up to 50% of your total life insurance value from the settlement companies. While many of them will try to reduce the valuation of your policy to reap maximum benefits, your bar should not go lower than 25%.
Calculate what your settlement might be
If estimates confuse you, use various online means to check eligibility. You can calculate how much you would probably get online – on settlement company websites. Bear in mind, however, that the estimates they quote do not mean that you have been approved.
There are also other factors including certain fees that need to be taken into consideration before you get to the net amount you will be eligible to receive.
You are probably now wondering why you need to sell your life insurance policy. There are, in fact, several reasons why you should consider a buyout deal rather than, for example, taking out a loan. If you are at least 65 years of age and in good health, you can sell your life insurance policy and use that money to enjoy a peaceful retirement.
FAQs
1. How old do I need to be to sell my life insurance?
The policyholder’s age varies, depending on which company they are dealing with. In many cases, people as young as 65 years are considered by buyout companies. Others, on the other hand, will only deal with individuals aged 70 years or more.
2. How many days does it take to get my life insurance settlement money?
You may have to wait from five to fifteen days before you are paid. In some cases, the wait may be up to two months’ long. The waiting period does not include the time spent getting all the paperwork sorted out.
3. Do I own any part of my life insurance after my life insurance settlement?
Unfortunately, you do not. Once you have been paid for your policy, its benefits upon your death are transferred to the buyout company.
Get your eligibility checked and your policy valued today. Once cleared, start reaping the benefits, pronto.
Interesting related article: “What is Life Insurance?”