Can I Sell My Life Insurance Policy? How Much Money Can I Get?

Shawn Plummer

CEO, The Annuity Expert

You may consider selling your life insurance policy to make extra money. This can be a great way to get some quick cash, but there are a few things you should know before you proceed. This guide will discuss how much money you can expect to receive if you sell your life insurance policy. We will also cover the process of selling life insurance policies and what to look for when choosing a buyer.

Can I Sell My Life Insurance Policy For Cash?

If you own a life insurance policy, you may be able to sell it for cash on the secondary market. This is typically done through a life settlement broker, who will help you find a buyer for your policy.

To sell your life insurance policy, it must have a “death benefit” – this is the amount of money paid out to your beneficiaries when you die. Death benefits can vary greatly, depending on your policy type, age, medical records, and lifestyle.

Why Would Someone Sell Their Life Insurance Policy?

There are a few reasons why someone would sell their life policy. The most common reason is that the policyholder needs money. They may have lost their job, been hit with unexpected medical bills, or faced foreclosure. Whatever the reason, they need cash, and they need it fast.

Another reason people sell their life insurance policies because they no longer need the coverage. This could be because they have retired, their children are grown, or they have other assets to cover their expenses. Whatever the reason, they do not need the death benefit and would rather have the cash now.

Other reasons include:

  • The policy is no longer needed and doesn’t want to pay premiums
  • The insurance premiums are too expensive to maintain
  • The seller may need more money now for an emergency
  • The policy owner needs financial assistance to pay for long-term care or medical expenses
  • The seller may have a chronic or terminal illness and needs cash now

What Kind Of Life Insurance Can Be Sold?

Almost any life policy can be sold, but a few exceptions exist. Whole life insurance policies and term life insurance policies are the most common types sold. Universal life, indexed universal life, and variable universal life policies can also be sold.

However, a few types of life insurance cannot be sold. These include group life insurance and government-issued and employer-provided life insurance.

Who Can Sell Their Life Insurance Policy?

To sell your life insurance policy, requirements must be met.

  • You must be the owner and the insured
  • Sellers that are age 65 and older
  • Anyone under 65 must have a significant health issue
  • The policy to be sold must be worth $100,000 or more

How Much Do You Get If You Sell Your Life Insurance Policy?

When you sell your life insurance policy, you will receive a lump sum of cash. The amount of money you receive will depend on several factors, including the retained death benefit of your policy, the length of your term, and the life expectancy and health status of the insured.

Generally, you can expect to receive between 50% and 75% of your policy’s death benefit, and the remaining amount goes to the buyer for their commission.

How Do You Sell Your Life Insurance Policy For Cash?

The process of selling a life policy is fairly simple and is called a life settlement or viatical settlement.

You will first need to find a buyer or broker interested in purchasing your policy. You can find buyers through online marketplaces (like The Annuity Expert) or by contacting life settlement companies directly.

Once you have found a life settlements buyer, you will need to complete some paperwork and sign over the ownership of your policy. The buyer will then make a lump sum payment to you as specified in the contract and continue to pay the future premium payments to the insurance company.

When choosing a buyer for your policy, it is important to do your research. Looking for a reputable buyer with a good track record would be best. You should also ensure that the buyer is willing to pay a fair price for your policy.

Is Selling Your Life Insurance Policy Worth It?

Selling your life insurance policy can be a great way to get extra cash. However, you should ensure you get a fair policy price. You should also be aware of the fees that buyers may charge.

If you need the money for long-term care and own an accelerated death benefit on a permanent insurance policy, you could use that instead of selling.

Remember, you will also pay taxes on any life settlement proceeds.

What Is The Downside Of Selling Your Life Insurance Policy?

The main downside of selling your life insurance policy is that you will no longer have coverage. In addition, if you die after selling your policy, your beneficiaries will not receive any money from the policy.

You should also be aware that some life policies have a clause that prevents you from selling the policy.

Before selling your policy to a viatical settlement company, read the terms and conditions carefully.

Next Steps

If you want to sell your life insurance policy, be sure to do your research first. There are several reputable buyers out there, but it’s important to compare quotes and ensure you understand all the terms of the sale.

Life settlements provide a great way to get some extra cash but remember that the amount you receive will depend on several factors.

Request a quote today and see how much money you could earn by parting with your policy.

Can I Sell My Life Insurance Policy For Cash? Learn How To Sell Your Life Insurance Policy While Still Alive.

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Frequently Asked Questions

Do you have to be 65 to sell your life insurance policy?

No, you don’t have to be 65 to sell your policy. You can sell your policy at any age, but you must meet the requirements to sell your policy.

Do companies buy life insurance policies?

Yes, companies do buy policies. However, they will usually only purchase policies with high death benefits.

Can you sell a life insurance policy that is not paid up?

Yes, you can sell an insurance policy not paid up. However, the policy must be in good standing to be sold.

What are the fees associated with selling a life insurance policy?

The fees associated with selling a policy vary depending on the buyer. Some buyers may charge an upfront fee, while. In addition, the policy must be in good standing to be sold.

Is selling a life insurance policy taxable?

The government (IRS) will tax any gain from selling your life insurance policy.

Can you sell your life insurance policy if you are under 65?

Yes, you can sell your policy if you are under 65 or in bad health. The sale of the policy will not be affected by your age.

Can I sell my term life insurance policy?

Yes, you can sell your term life insurance policy if the policy is convertible to a permanent life insurance policy. However, the policy must be in good standing to be sold.

Where can I sell my life insurance policy?

Online brokers like The Annuity Expert or by contacting life insurance companies directly.

How much can I sell my life insurance for?

The amount you can sell your policy will depend on the death benefit, policy type, and age. In general, you can anticipate receiving between 50% and 80% of your policy’s death benefit, with the remainder paid to the buyer for their commission.

What are the requirements to sell my life insurance policy?

To sell your policy, you must be the policy owner and be in good standing. In addition, you must complete an application and submit it to the buyer.

How do I know if I am eligible to sell my life insurance policy?

To be eligible to sell your policy, you must be the owner of the policy, and it must be in good standing. In addition, the seller must be in poor health, the proceeds are greater than $100,000, and have a permanent or convertible term policy.

What is the difference between selling my life insurance policy and surrendering my life insurance policy?

When you sell your policy, you receive a lump sum of cash. Likewise, when you surrender your policy, you receive the policy’s cash surrender value.

What is the closing process of selling my life insurance policy?

The life settlement process of selling your life insurance begins with finding a life settlement company for your policy. Once you have found an interested buyer, you will complete a life insurance application and submit it to the buyer. The buyer will then review the application and make an offer. If you accept the offer, the buyer pays you the agreed-upon amount and takes over the policy.

What are my options if I am not eligible to sell my life insurance policy?

If you are not eligible to sell your policy, you may be able to surrender the policy for its cash value or borrow against the policy.

What is the downside of selling your life insurance policy?

The downside of selling your life policy is that you will no longer have coverage. In addition, the sale of the policy may trigger a taxable event.

What kind of life insurance can be sold?

Most policies can be sold, including whole life, convertible term life, and a universal life policy. However, the policy must be in good standing to be sold.

What is the best age to sell a life insurance policy?

The best age to sell a policy is typically between 60 and 70. This is because older policies tend to have a higher death benefit and are less likely to lapse.

Do I get my money back if I cancel my life insurance?

If you have permanent life insurance, you may be able to get some of your money back if you cancel your policy. This is because permanent life insurance policies have a cash value that grows over time. However, you will not get all your money back, as the insurance carrier will keep the fees charged when you originally purchased the policy.

Do I get my money back if I cancel my term life insurance?

If you cancel your term life policy, you will not receive any money back. This is because term policies do not have a cash value component. However, if you have a convertible term life insurance policy, you may be able to sell it for a lump sum of cash.

Can you cash out a life insurance policy before death?

If you need cash and are the owner of a policy, you may be able to borrow against the policy or sell it for a lump sum of cash. However, if you surrender your life insurance policy, you will only receive the policy’s cash value.

Who can I sell my policy to?

Most life insurance policies can be sold to third-party buyers, such as viatical settlement companies.

Can I sell my life insurance policy if I am not terminally ill?

You must be 65 years or older to sell your life insurance policy. However, some life insurance policies can be sold before this age if the policyholder faces significant financial hardship.

What does it mean to sell your life insurance policy?

When you sell your life insurance policy, you essentially sell the death benefit to a third party. The third-party will then make payments to you as specified in the contract.

How much will I get if I sell my $100,000 term life insurance policy?

The amount you will receive for your life insurance policy will depend on several factors, such as the type of policy, the death benefit, and the age and health of the policyholder. However, you can generally expect between $20,000 and $80,000 of the $100,000 death benefit.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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