Since a policy is just like any other asset, you can factor it into the decisions you make regarding your financial future at any time. And while there are a variety of reasons someone would consider selling all or a portion of their life insurance, some of the most common include:
- Funding retirement
A recent report by the World Economic Forum found that the retirement savings gap for the average American has steadily increased. Men are living 8.3 years longer than they have the retirement dollars to fund and women are living almost 11 years longer and many are forced to make difficult decisions to help make up for the increasing gap in their retirement savings.
- Premiums are no longer affordable
Depending on the terms of a policy, changes in the insurance market and poor policy performance can drive up premiums, which often leads to surrendering a policy, letting it lapse or finding a more financially beneficial option, like selling all or a portion of their policy.
- Funds are needed for a costly or unexpected expense
Faced with financial changes or hardships, many need to liquidate their policy – or a
portion of it – to be able to fund a large expense. Receiving a lump sum can be essential to fund assisted living or cancer treatments, pay medical bills or premiums on another existing policy, invest in a business or new home, pay off a debt or tax liability, or purchase an income generating annuity.
- Lifestyle or business changes
A number of lifestyle or business changes are often the reason many consider choosing a different policy option. This could include divorce, retirement, the absence of an estate tax burden, beneficiaries who no longer need or want the policy benefits, or when a family business is sold and that policy is no longer necessary.