Selling a life Insurance Policy for Cash is Safe and Secure: Here's Why

July 7, 2020

A senior man benefitting from the safe and secure sale of his life insurance policy for cash

You’ve done your research, but still have questions about life settlements. Is selling a life insurance policy for cash truly safe and secure? Is your personal information protected? Are there hidden fees?

As long as you work with a good, reputable, and transparent life settlement company, you should be confident that your life settlement transaction will be safe and secure, and that your needs will be put first.

“Fortunately, most of the negative reports about life settlements are outdated and invalid,” says Michael Freedman, CEO of Lighthouse Life. “Twenty years ago, yes, seniors had to be wary of some of the business practices in life settlements. But today, 43 states regulate life settlements and it has become one of the most safe and secure financial service transactions in the U.S.”

If you're thinking about selling your policy for cash, here are three important reasons you should feel comfortable about life settlements.

Why It's Safe to Sell Your Life Insurance

  1. You don't have to settle for the first offer.
  2. Reputable companies disclose fees and commissions.
  3. Companies advocating for you protect your personal information.

 Don't Settle for the First Offer

Before you take cash for the sale of your life insurance policy, make sure that you get a few appraisals. Life settlements are conducted through life settlement companies such as Lighthouse Life. But remember that not all companies are created equal.

Think of life settlements as you would the sale of any asset. You have the freedom and power to shop around for the company, terms, and price that's right for you.

First, make sure that the companies you work with are licensed by your state insurance department. Licensing ensures that they are using state-approved forms and have privacy protections and plans to detect and report fraud.

Second, compare the offers to buy your policy that you receive. The amount that you receive from selling your life insurance policy for cash should be more than you would get if you lapsed or surrendered the insurance, and should also be more than any accelerated death benefits that may be available at the time.

Ask About Hidden Fees and Commissions

Also, watch out for hidden fees and high commissions that can substantially reduce the life settlement payment you receive.  Require any company you work with to disclose all fees being paid to brokers and others.

Life settlement brokers often take very high fees and commissions for helping a policyowner sell their policy. But what's worse, some don't fully disclose the amount of money they are taking from their client. For this reason, many seniors are left with cash sums less than what is rightfully theirs.

You should work only with life settlement companies and brokers that are transparent about fees and commissions. They should tell you how much settlement brokers, advisors, and agents are receiving when you sell your life insurance. Lighthouse Life always discloses this information.

Your Personal Information is Protected by Law

One of the main concerns about life settlements is whether your personal information will be safe. Since the transaction involves selling your life insurance policy to a third-party, you should be confident in the life settlement company you are working with.

Life settlement companies are required by law to protect your personal information when selling a life insurance policy for cash. This includes information about your identity, finances, and health. Make sure you understand how they will protect your private information and abide by the privacy and consumer protection laws that are in place to protect you.

At Lighthouse Life, we help seniors sell their life insurance policies through life settlements. But we also help people navigate through challenges when they need money. Whether it's a financial hardship, retirement planning, or long-term care planning, we're here to help you sell your life insurance safely and securely.