Life insurance is an essential financial tool that can provide peace of mind and security for your loved ones during your passing. For those facing terminal illnesses, the need for this type of protection is even more critical. We understand that navigating the complexities of life insurance can be challenging, especially when dealing with poor health. 

Every individual deserves access to the protection they need. In this blog, “Selling A Life Insurance Policy With Poor Health,” we’ll explore options, strategies to find the right coverage, and ways to navigate the underwriting process. We are committed to helping you find the solution to your unique situation.Blog feature image with a pen and a piece of paper with with brown background and a caption that says life insurance policy selling

Why Sell Your Life Insurance Policy?

When facing difficult times, you may find yourself in need of cash to cover expenses or to improve your quality of life. If you’re struggling with poor health, selling your life insurance policy can be valuable. By doing so, you can receive a lump sum payment that can be used to cover medical bills, daily living expenses, or any other expenses you may be facing. 

While selling your life insurance policy is not the right decision for everyone, it is a viable option that can benefit those who need it most. Additionally, this option provides flexibility and control over your finances, allowing you to make decisions that can positively impact your quality of life. At the same time, selling your life insurance policy can also provide peace of mind, knowing that you have taken care of your loved ones’ financial well-being.

Who Can Sell Their Life Insurance Policy?

If you face challenging times and need financial support, selling your life insurance policy can be viable. But who is eligible to sell their policy? The truth is that anyone who holds a life insurance policy can sell it. However, those who can benefit most from selling their policy are usually individuals with a life expectancy of fewer than 10 years, facing significant medical bills, or who have experienced a significant change in their financial circumstances. 

If you are considering selling your life insurance policy, it’s essential to consult with a reputable life settlement company to help you evaluate your options and determine if this is the right decision for you. At the end of the day, the decision to sell your policy is a personal one that requires careful consideration. Still, for those who need financial support and are eligible, selling your life insurance policy can be a valuable option that provides peace of mind and financial stability.

How to Sell Your Life Insurance Policy

Selling your life insurance policy can be a complex process that requires careful consideration and guidance. Here are the basic steps to follow when considering this option:

Determine your eligibility: Before selling your policy, you must determine your eligibility. Your age, health status, and policy type will impact your ability to sell your policy.

Get an appraisal: Once you’ve determined your eligibility, you’ll need to get an appraisal to determine the value of your policy. This will involve thoroughly evaluating your policy’s features, including age, health status, and policy type.

Find a reputable life settlement company: To ensure a smooth and fair transaction, working with a reputable life settlement company is essential. A viatical settlement company can purchase life insurance policies for individuals with life-threatening illnesses for a fair price. They give you a lump-sum settlement, typically in the form of cash payment, in exchange for your life insurance policy.

Selling your life insurance policy can be a daunting process. However, it can also provide significant financial benefits for those who need it most. With the right guidance and support, you can confidently navigate this process and ensure that you’re making the best decision for yourself and your loved ones.

selling an insurance policy

How Much Money Can You Get For Your Life Insurance Policy?

Selling your life insurance policy can provide a valuable source of income for those facing financial challenges. The amount of money you can receive for your policy will depend on several factors, including your age, health status, and the type of policy you have. In general, policies with higher death benefits will command higher sale prices. 

Additionally, policies with lower premiums will generally be more attractive to buyers as they offer a better return on investment. 

Ultimately, the money you can receive for your life insurance policy will vary depending on your circumstances. Still, by exploring your options and working with an expert, you can maximize the financial benefits of selling your policy while providing peace of mind for yourself and your loved ones.

Is Selling Your Life Insurance Policy Worth it?

Selling their life insurance policy can be a valuable option for individuals facing challenging financial circumstances. But is it worth it? Ultimately, the decision to sell your policy will depend on your unique situation, including your financial needs, health status, and personal preferences. Selling your policy can provide a lump sum of cash that can be used to cover medical bills, daily living expenses, or other financial obligations. 

Additionally, selling your policy can provide peace of mind, knowing that you have cared for your loved ones’ financial well-being. However, it’s important to carefully consider the potential drawbacks, such as losing the death benefit that your policy provides. 

With the right support and guidance, selling your policy can be a viable option that provides significant financial benefits, allowing you to regain control over your finances and provide for yourself and your loved ones.

Are There Alternatives to Selling A Life Insurance Policy With Poor Health?

Several alternatives to selling your policy may be worth considering, depending on your unique situation. For example, you can borrow against your policy’s cash value or explore government programs that can provide financial assistance. 

You may be able to adjust your policy to reduce your premium payments or increase your death benefit. Exploring community resources such as non-profits, charities, or local support groups that can offer financial assistance and emotional support during difficult times is essential. By taking the time to explore your options, you can make an informed decision that provides the financial support you need while protecting your loved ones’ future.

Viatical Settlements 

A viatical settlement is a financial agreement where an insurance policyholder diagnosed with a life-threatening illness such as cancer or ALS, sells their policy to a third-party company in exchange for a lump sum of cash. The company takes over paying the policy’s premiums until the policyholder dies. At that point, they receive the death benefit. 

American Life Fund is a viatical settlement company with years of experience helping individuals with serious l illnesses access the funds they need to cover expenses like medical bills, alternative treatments, and living expenses. However, it’s crucial to carefully evaluate the terms of the agreement and work with a trustworthy company

Overall, viatical settlements can be a viable option for those with life-threatening illnesses. With the guidance of a reputable company like American Life Fund, you can make an informed decision that meets your financial needs while protecting your loved ones’ future.

how much do you get for selling life insurance policy?

Frequently Asked Questions

Frequently Asked Questions about Selling Your Life Insurance Policy

Q: What is a Life Settlement?

A: A life settlement is a financial transaction where a policyholder sells their life insurance policy to a third-party buyer in exchange for a lump sum payment. The buyer assumes ownership of the policy and pays the premiums until the policy matures.

Q: How Does a Life Settlement Work?

A: To sell your life insurance policy, you must work with a licensed life settlement provider. They will evaluate your policy to determine its value and make an offer. If you accept the offer, the provider will assume ownership of the policy and pay you a lump sum of cash. They will then become responsible for paying the premiums until the policy matures. At that point, they will receive the death benefit.

Q: Who Can Sell Their Life Insurance Policy?

A: Generally, individuals over 75 with a life insurance policy of at least $150,000 can qualify for a life settlement. However, the specific requirements can vary by company and state.

Q: How Much Money Can I Expect to Receive For my Policy?

A: The amount of money you can receive for your policy will depend on several factors, including your age, health, and the terms of your policy. Generally, you can expect to receive a percentage of your policy’s face value, typically between 10% and 60%.

Q: Is Selling my Life Insurance Policy Taxable?

A: The tax implications of selling your life insurance policy will depend on several factors, including the amount you receive and the type of policy you have. If the amount you receive exceeds the policy’s cost basis, you may owe taxes on the difference.

Q: Can I Still Qualify For Government Benefits if I Sell my Life Insurance Policy?

A: Selling your life insurance policy may affect your eligibility for government benefits, such as Medicaid. It’s essential to consult with a financial advisor or an attorney to understand the potential impact on your benefits.

Q: What Are The Alternatives to Selling my Life Insurance Policy?

A: Alternatives to selling your life insurance policy include borrowing against the policy’s cash value, adjusting the policy’s terms, and exploring government programs or community resources that offer financial assistance.

Q: What is a Viatical Settlement?

A: A viatical settlement is a financial agreement where a person with a life-threatening illness sells their life insurance policy to a third-party company for a lump sum of cash. The company takes over paying the premiums and receives the death benefit when the policyholder passes away. This arrangement provides immediate financial support to individuals who need funds to cover expenses. It’s important to evaluate the terms of the agreement and work with a reputable company to ensure a fair deal.

Q: Is Selling my Life Insurance Policy Worth it?

A: Whether selling your life insurance policy is worth it will depend on your unique financial situation. It’s crucial to carefully evaluate the terms of the agreement and work with a reputable company before making a decision. 

About the Author: Eugene Houchins

In 2005, Gene Houchins founded American Life Fund Corp, addressing a significant gap in the life insurance industry. As its leader, Gene's organization specializes in providing swift financial support for those with severe illnesses, assisting in both medical and living expenses with viatical settlements. His expertise also extends to counseling seniors on managing their life insurance policies.

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