In 1911, the United States Supreme Court established life insurance policies were personal property. Since then, it has been established law that your life insurance policy is just like any other asset, and you have the choice to consider how best to use it for your financial future. Some of the most common reasons you may consider selling all or a portion of your policy include:
1. You Can No Longer Afford Premiums
Depending on the terms of your policy, changes in the insurance market and poor policy performance could drive up the price of the premiums you pay. Or you may have experienced an unexpected financial issue – like increased medical bills, legal issues, assisted living costs or tax issues – that’s now stretching your budget. Any number of factors often force people to stop paying their premiums and surrender a policy or simply let it lapse. In fact, the majority of all life insurance policies lapse, and all the funds invested through premiums are simply kept by the insurance company. The better option is often to sell all or part of your policy for a cash amount far higher than the surrender value.
2. Funds Are Needed To Pay For Medical Care Or Some Other Expense
Faced with financial changes or hardships, selling your policy to recoup the equity you’ve built over the years is a viable option to fund a large expense, such as funding assisted living or cancer treatments, paying medical bills or premiums on another existing policy.
3. You Want To Re-Invest The Equity You’ve Built To Take Advantage Of A Better Opportunity
You may want to recapture the dollars you’ve paid over the years into your life insurance policy and invest in a business, purchase a new home, pay off a debt or tax liability, purchase an income-generating annuity or take advantage of another opportunity where the equity built in your policy could better serve you.
4. Your Life Circumstances Have Changed
As we move through the various stages of life, many individuals find they simply no longer need a life insurance policy. Life changes, including divorce, retirement, the absence of an estate tax burden or your beneficiaries no longer needing the policy benefits are also reasons to consider selling a policy.
To learn more about if this is the right option for you, use our confidential Online Options Tool or call us at (800) 561-4148 to speak to a live representative.