Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Video Transcript: Today's question is, Can I sell my life insurance policy? Well, number one, a life insurance policy is personal property. Could you sell it? I think you can, usually through the life settlement market. But keep in mind that the original reason that you sold the life insurance was not to sell it for that specific purpose and most carriers and life insurance companies are going to take a dim view on you trying to buy insurance for just the purpose of selling it.
But if the reason you bought life insurance doesn't exist any longer, you could go ahead and sell it on the secondary market of life insurance settlement, and you can sell it for cash. Generally, a cash value contract is going to get a little bit more than what you have in your policy; sometimes a lot more, depending upon the death benefit and your timeline.
Can you sell it? You could sell it and again, I recommend make sure that you're doing this for the right reasons. And make sure that your coverage is no longer necessary.
Viaticals, or life settlements, are the vehicles by which persons can sell their life insurance policies. However, the type of life insurance policy that can be sold is extremely limited. The policy nearly always has to have cash value, and the health of the insured person must be poor enough that those purchasing the policy, expect them to die within a short period of time, so that they can cash in on it.
If you are in poor health and have a life insurance policy that you can no longer afford to pay for, you might ask your children if they would pitch in to pay the premiums. Then make them at least partial beneficiaries. If you need cash, you might be able to borrow from the cash value. Some policies even have "living benefits" where you can take part of the insurance proceeds in cash if you become critically, chronically, or terminally ill.
Selling your life insurance policy should be a last resort. But if you do, be sure to deal with a reputable life settlement company.
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But if the reason you bought life insurance doesn't exist any longer, you could go ahead and sell it on the secondary market of life insurance settlement, and you can sell it for cash. Generally, a cash value contract is going to get a little bit more than what you have in your policy; sometimes a lot more, depending upon the death benefit and your timeline.
Can you sell it? You could sell it and again, I recommend make sure that you're doing this for the right reasons. And make sure that your coverage is no longer necessary.
If you are in poor health and have a life insurance policy that you can no longer afford to pay for, you might ask your children if they would pitch in to pay the premiums. Then make them at least partial beneficiaries. If you need cash, you might be able to borrow from the cash value. Some policies even have "living benefits" where you can take part of the insurance proceeds in cash if you become critically, chronically, or terminally ill.
Selling your life insurance policy should be a last resort. But if you do, be sure to deal with a reputable life settlement company.