Retirement is on the horizon and planning is underway.
Part of this process includes taking a closer look at your insurance coverage.
When was the last time you checked your life insurance plan?
Chances are times have changed, and the policy you bought years ago doesn’t serve you today.
The good news is that you can sell your life insurance policy and use it for retirement.
This relatively unknown transaction is called a life settlement. It’s different from taking cash out of your policy or surrendering it all together.
Here’s a three-step process on how to review your policy, the questions to ask, and an action plan to help you get a lump sum of cash for retirement.
- Review your insurance coverage
- Questions to ask about life settlements
- Your life settlement action plan
Step 1. Review Your Insurance Coverage
Every retirement plan includes reviewing insurance policies. Start by taking a look at your life insurance policy. To do this, you can contact your life insurance carrier and request a copy of the declaration page or policy summary.
With that page in front of you, look for and write down the following information:
- Policy number
- Life insurance policy type
- Issue date
- Total death benefit
- Cost of premium
- Who do the benefits apply to?
- The beneficiary
With this information on hand, you’ll have a better idea of whether the plan still works for you today.
For example, your children might have grown, you might be single now, or the premiums might be out of your budget today.
“The truth is, not everyone needs life insurance,” says Michael Freedman, chief executive officer at Lighthouse Life. “And sadly many seniors are paying for policies they no longer need or can afford.”
If you’ve determined that you no longer need your policy, the next step is to ask the right questions.
Step 2. Questions to Ask about Life Settlements
When it comes to life insurance, there are key questions that will help you discover if you can actually sell your life insurance plan for cash.
Can I sell my life insurance policy?
Yes, you can sell your life insurance policy with a life settlement. But, you need to qualify. If you are 70 or over, own a policy with a death benefit of $100,000 or more, and have experienced a change in your health since you bought the policy, you might qualify for a life settlement.
How much will I get paid for my life insurance policy?
For many seniors, life settlements are great retirement assets. To find out how much your policy is worth, you can have it appraised for its market value. An offer to buy the policy should be greater than your cash surrender value plus any accelerated death benefits that might apply at the time of purchase. In general, life settlements pay the policy owner four or more times greater than the life insurance company will pay.
Step 3. Your Life Settlements Action Plan
If you’ve discovered that you no longer want or need your policy, the next step is to see if you qualify for a life settlement. Luckily, this step is quick and easy with the right company. Our process, for example, requires filling out an online form and answering a few questions. To prepare for the form, you’ll need:
- Your email address
- Your contact information
- Your policy information
If you have any questions about life settlements and would like to speak with an expert, please contact us today.
