How to Cash Out Your Life Insurance Policy During an Economic Hardship
Going through an economic hardship can turn your life upside down. Whether it’s a job loss, the downturn in the economy due to the coronavirus, or unplanned medical bills, financial disruptions can be very difficult to navigate.
If you’re going through a tough financial time and are looking for ways to supplement your income quickly, a life settlement can help you access cash and give you peace of mind.
In this short guide, we’ll walk you through three steps to take when deciding if you want to cash out your life insurance policy and ease the financial impact of an economic hardship.
Three Steps to Take When Deciding If You Want to Cash Out Your Life Insurance Policy
- Decide if you still need or can afford your life insurance policy.
- Find out if you qualify for a life settlement.
- Choose a life settlement appraisal that’s right for you.
Step 1: Do You Need or Can You Still Afford Your Life Insurance?
You know that you need cash, and you’re thinking about tapping into your life insurance policy. Before you can cash out your policy, it’s important to know that a life settlement is not the same as borrowing against the value of a policy. Instead, a life settlement is the sale of some or all of your life insurance policy’s death benefit for its market value. As a result, after you complete a life settlement, you’ll have either a reduced benefit or no benefit remaining for your beneficiaries, but you’ll have a cash payout in hand. Is that okay? For many seniors, the answer is yes.
A growing number of seniors no longer need or can afford their life insurance plans. Reasons for this can include premiums that have become too expensive, changes in the needs of beneficiaries, or a change to the insured’s long-term financial plan.
If you find yourself in one of these scenarios, it may be time to think about how to cash out your life insurance policy.
Step 2: Do You Qualify for a Life Settlement?
If you’ve decided you want to sell your policy, the next step is to find out if you qualify for a life settlement. Qualifications for a life settlement include:
- Are you 70 or older?
- Has your health changed since you purchased your policy?
- Is your life insurance benefit $100,000 or more?
If you’ve answered yes to all three questions, that’s a good start to qualifying for a life settlement. Keep in mind that you don’t always have to be 70 or over or have a change in health in order to qualify for a life settlement.
Lighthouse Life makes it easy to see if you qualify. All you need to get started is to complete a short online form with a few questions about yourself, your policy, and your health.
Once you submit this information, you’ll be able to speak with one of our relationship specialists who will ask some additional questions and provide you with next steps. If qualified, we’ll offer to buy your insurance for its market value.
Step 3: Choose an Appraisal That’s Right for You
The good news is you don’t have to accept the first offer to purchase your policy that comes your way. Give yourself time and be sure to do your research to find the right life settlement company. At Lighthouse Life, we believe in empowering policyholders to make well-informed decisions, especially when it comes to the sale of their life insurance policies.
If you do accept our offer, we’ll provide you with the forms to complete the life settlement. After we receive and process the documents, and the insurance company changes ownership of the policy, you will receive the full amount of the offer. This process usually takes 45-60 days from when you first contact us.
Overcoming Economic Hardships with Life Settlements
A life settlement can be a vital part of your financial plan to overcome the challenges of an economic hardship. Planning ahead can give you greater control of your finances.
At Lighthouse Life, we want to make sure you have the support you need every step of the way. If you have any questions, simply give us a call at 1-866-910-4000. You can also start the life settlement qualification process right now.