Signing up for a life insurance policy is a major life decision. No one wants to think about morbid topics like death, funerals, and a personal will, but these are subjects that must be confronted in order to ensure our family members are taken care of after we are gone.
Taking out a life insurance policy is a great way to make sure that your family is financially stable in the event of your death, but sometimes life insurance policy holders may want to consider selling their policy in exchange for monetary compensation while still alive.
You may find yourself wondering why anyone would sell their life insurance policy, but there are a number of reasons why it may make sense given the right situation. Let’s take a look at the three most common reasons for selling a life insurance policy.
Medical expenses
Selling a life insurance policy to a third party in exchange for immediate funds is called a life settlement, and it is becoming more and more popular among elderly Americans. There are a number of ways to go about attaining a life settlement, and while it may sound confusing at first, companies such as Sell My Life Insurance make it very easy to sell an insurance policy.
A lot of families and individuals find themselves unable to afford medical bills and expenses that are ultimately much more urgent than whatever costs their life insurance policy was originally intended to account for. Selling a life insurance policy can help provide additional funds for expenses such as nursing homes, surgeries, assisted living, and hospice care.
Additionally, selling your life insurance policy may help you qualify for Medicaid. In order to qualify for Medicaid services, you must have less than $ 2,000 in assets, and certain life insurance policies can be considered assets that would count against a Medicaid decision. If an individual is in need of Medicaid assistance, selling their life insurance policy in order to qualify can be a beneficial option.
Overlapping policies
Many policy holders find themselves with overlapping life insurance policies and opt to sell one. This happens most commonly among those who have taken out an individual life insurance policy but then are also enrolled in a group life insurance policy via their employer.
In some of these cases, one life insurance policy will be enough to ensure the financial future of relatives and close loved ones, so it makes sense to sell one of the policies for a more immediate profit.
Unaffordable premiums
We’ve all experienced it: financial situations change and bills that were once manageable are suddenly an expected burden. Often times, this happens with respect to life insurance premiums.
Perhaps the amount of money saved away for retirement turns out to be inadequate, or premium prices unexpectedly increase. Whatever the case may be, if keeping up with premium payments is a problem for a life insurance policy holder, they may want to consider selling the life insurance policy and attaining a life settlement.
Using the income gained from selling the first life insurance policy, sellers can then purchase a new life insurance policy with a more affordable monthly premium plan.
Be sure to consider all options
There are many other reasons why someone may want to sell their life insurance policy, but what’s most important is that you determine whether this is the right course of action for you. If you are considering selling your life insurance policy, remember that it is not a decision to be made lightly. Be sure to consult loved ones, trusted medical professionals, as well as legal counsel, before making any final decisions.
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