How To Sell Your Life Insurance Policy Using Viatical Settlements

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding the Basics of Viatical and Life Settlements

What is a Viatical Settlement?

A viatical settlement allows individuals with life-threatening illnesses to sell their life insurance policies to third parties for immediate cash. This process involves transferring ownership of the policy to the buyer, who then pays the remaining premiums and receives the death benefit upon the policyholder’s death. Typically, the payout is around 50-60% of the policy’s face value, offering a valuable financial lifeline to those in critical need.

What is a Life Settlement?

A life settlement, while similar to a viatical settlement, is available to healthy policyholders as well. It allows you to sell your life insurance policy for more than its cash surrender value but less than the death benefit. This option can be particularly appealing for those who no longer need their policy or are struggling with premium payments.

Viatical Life Insurance

Types of Policies That Can Be Sold

  1. High Death Benefit Permanent Policies: These policies are attractive to buyers due to their substantial coverage amounts, which can provide significant financial security to beneficiaries.
  2. Permanent Policies with Large Cash Value: These policies accumulate cash value over time, making them valuable assets for potential buyers.
  3. Convertible Term Policies: These policies offer the flexibility to convert from term to permanent coverage, making them appealing to a broad range of buyers.

Factors Affecting Sale Value

  • Policyholder’s Age and Health: Policies from older or less healthy individuals are generally more valuable.
  • Policy Type: High death benefits, accumulated cash value, and convertible features enhance marketability.
  • Market Conditions: Demand for life insurance policies fluctuates, impacting the value.

How We Can Help

At The Annuity Expert, we understand that selling your life insurance policy can be a daunting decision. Whether you’re dealing with a life-threatening illness or simply seeking to relieve financial strain, we are here to guide you through every step of the process. As a seasoned insurance agency, annuity broker, and retirement planner with over 15 years of experience, we are committed to helping you find the best solution at the lowest cost.

Understanding Your Needs

We recognize that deciding to sell your life insurance policy often comes with emotional and financial stress. Whether it’s the uncertainty of a terminal illness or the burden of unmanageable premiums, these situations can feel overwhelming. We stand by your side, offering not just expertise but compassion and understanding.

Our Commitment to You

We believe in providing transparent, straightforward advice that empowers you to make informed decisions. Our goal is to ensure you receive the maximum possible value for your policy, tailored to your unique circumstances. We are dedicated to fighting for your financial peace of mind, ensuring you get the best possible outcome with minimal hassle.

A Life Insurance Policyowner Sells Her Policy To A Third Party In A Viatical Settlement

What We Recommend

Step 1: Initial Consultation

  • What Happens: Contact us for a free consultation where we evaluate your policy and discuss your needs.
  • Benefit: Gain clarity on your options and understand the potential value of your policy.

Step 2: Professional Appraisal

  • What Happens: Our experts conduct a thorough appraisal of your policy to determine its market value.
  • Benefit: Receive an accurate valuation and competitive offers from reputable buyers.

Step 3: Secure the Best Offer

  • What Happens: We present you with the best offers, helping you choose the one that maximizes your benefits.
  • Benefit: Obtain immediate financial relief with confidence and ease.

Features and Benefits

  • Expert Guidance: Professional advice throughout the process ensures you make informed decisions.
  • Competitive Offers: Access to a network of buyers guarantees the best possible price for your policy.
  • Seamless Process: From consultation to sale, we handle all the details, ensuring a stress-free experience.

Overcoming Objections

  • Concern about Value: We ensure competitive bidding to maximize your policy’s worth.
  • Worry about Complexity: Our streamlined process takes care of all the details, simplifying the experience.
  • Fear of Regret: With transparent guidance, you can make confident, well-informed decisions.

Neglecting to work with us could mean missing out on significant financial benefits and enduring unnecessary stress. By choosing The Annuity Expert, you secure not just immediate cash but peace of mind and financial stability. Imagine the relief of having the funds you need to cover medical expenses, pay off debts, or simply enjoy a better quality of life.

Contact us today for free advice or to get a free quote and take the first step towards financial freedom.

Need Help Selling Your Life Insurance Policy?

Contact us if you need help selling a life insurance policy. The service is free of charge.

Life Insurance Inquiry

Questions From Our Readers

What is a viatical settlement contract?

A viatical settlement contract is an agreement between a policyholder and a viatical provider in which the policyholder sells their life insurance policy for a lump sum of cash. The viatical provider becomes the policy owner and is responsible for paying the premiums.

What are the eligibility requirements for selling an insurance policy?

Most providers require that the policyholder be at least 65 years old and have a face amount of at least $100,000. The shorter the life expectancy, the higher the lump sum payout can potentially be.

Are viatical settlements legal?

Yes, viatical life settlements are legal in all 50 states.

How much is paid in a viatical settlement?

The amount of money paid depends on several factors, including the policyholder’s age, the policy’s face value, and the policyholder’s life expectancy.

What is the difference between viatical settlements and accelerated death benefits?

Viatical settlements and accelerated death benefits allow policyholders to receive money from their life insurance policies before they die. However, there are some key differences between the two.

With a viatical settlement, the policyholder sells their policy to a viatical provider for a lump sum of cash. The viatical provider becomes the policy owner and is responsible for paying the premiums.

With an accelerated death benefit, the policyholder can borrow against their policy’s death benefit while they are still alive. The policyholder is responsible for repaying the loan with interest, and the death benefit goes to the beneficiaries when they die.

Are viatical settlements taxable?

The proceeds are generally taxable as income. However, there may be some exceptions depending on the state in which you live. Therefore, it’s important to speak with a tax advisor before entering into a viatical settlement to ensure that you understand the tax implications.

Who does a viatical settlement broker represent?

A broker represents the policyholder, not the viatical provider. The broker’s job is to find the best viatical provider for the policyholder and negotiate the settlement terms.

How do I find a viatical settlement broker?

By filling out the form above, you can request a quote from one of our qualified brokers. We will then help connect you with a broker who can answer any questions you have and walk you through the process.

Who effectuates viatical settlement contracts?

A viatical settlement provider is a company that buys life insurance policies from policyholders for a lump sum of cash. The provider becomes the policy owner and is responsible for paying the premiums.

What factors does a viatical settlement provider consider when making an offer?

When considering an offer, a provider considers several factors, including the policyholder’s age, face value, and life expectancy.

Who is a viatical settlement provider?

A viatical settlement provider is a company that buys life insurance policies from policyholders for a lump sum of cash. The provider becomes the policy owner and is responsible for paying the premiums.

How much do viatical settlement brokers make?

Brokers typically charge a fee of 10-15% of the death benefit as their commission.

How much do viatical settlements pay?

Life settlements typically pay 50-80% of the death benefit, depending on the policyholder’s age and life expectancy.

When can viatical settlements be issued?

Viatical settlements can be issued at any time.

How much is paid in a viatical settlement?

The amount paid depends on the policyholder’s age, the policy’s face value, and the policyholder’s life expectancy.

Are viatical settlements ethical?

Viatical settlements are ethical because they provide much-needed cash to policyholders while still alive. The policyholder is free to use the money however they see fit, and their family is protected financially in the event of their death.

Who will receive the death benefit after completing a viatical settlement transaction?

The death benefit is paid to the beneficiaries named in the life insurance policy.

What is the risk associated with buying a viatical?

The main risk associated with buying a viatical is that the policyholder may live longer than expected, and the death benefit will not be enough to cover the costs of their final expenses.

Who qualifies for a life settlement?

To qualify for a life settlement, the policyholder must be at least 18 years old and have a life insurance policy with a face value of $100,000 or more.

Can I buy life insurance and sell it to one of those places that will give you money for the policy?

Yes, you can purchase a life insurance policy and potentially sell it through a life settlement company after it has been in place for at least two years. These companies typically buy policies when the insured’s health is declining, as this increases the policy’s value.

Why do I have to be terminally ill to sell my life insurance policy?

Life settlement companies usually purchase policies from individuals with shorter life expectancies, which allows them to reap the benefits of the policy sooner.

At what age can you sell your life insurance policy?

The standard age to sell a life insurance policy, particularly through a life settlement, is typically around 65 years old. However, there are exceptions. If you are under 65, you may still be eligible to sell your policy if you have a terminal illness. Additionally, for policyholders under 65 who are not terminally ill, some providers may consider purchasing a policy if it is a $2+ million whole life policy with a substantial amount of cash value. Each life settlement company has its own criteria, so it’s important to check with potential buyers for their specific requirements.

Can I sell my Jefferson Pilot life insurance?

Yes, you can sell your Jefferson Pilot life insurance. This involves selling your policy to a third party for a lump sum that is typically higher than the cash surrender value but less than the death benefit.

Can I sell an Index Universal Life insurance policy?

Yes, you can sell your IUL.

Can I sell a $50,000 life insurance policy?

While the standard in the market is usually policies worth $100,000 or more, selling a $50,000 policy is possible, especially under certain conditions like terminal illness.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

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

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