When it comes to cashing in on a life insurance policy, one of the main questions people have is:
“Can I sell my whole life insurance policy for cash?”
The answer is yes – in a transaction called a life settlement.
In a life settlement, the buyer pays for your policy and takes responsibility for the premium payments. When you sell your plan, you forfeit any benefits your beneficiaries would receive upon passing. Selling a life insurance policy for cash is a big decision and requires some understanding and consideration.
How to Sell Your Whole Life Insurance Policy
To sell your life insurance for cash is a new opportunity for some. If you’re interested in selling your whole life insurance policy, the first step is to contact a life settlement company.
Once you’ve found the perfect life settlement company, signing a life settlement contract is next. This contract will outline the terms of the sale, including the purchase price and the transaction date.
Once the contract is signed, the buyer will pay you the purchase price and take responsibility for paying the premiums on your policy. When you sell your policy, you forfeit any death benefits your beneficiaries would have received.
If you are a Federal Employee and have been looking for a way to sell your Federal Employee Group Life Insurance policy or FEGLI policy, check out our blog post How to Sell a Federal Employee Group Life Insurance Policy.
If you’re considering selling your whole life insurance policy, weigh all the pros and cons before making a decision. Selling your policy is a big decision, and ensuring you’re doing what’s best for you and your family is important.
Contact American Life Fund
Selling an insurance policy can be daunting but you deserve to know all of your options. At American Life Fund, we are a Life and Viatical settlement company. If you have any questions about selling a whole life insurance policy, be sure to contact us!
We will be more than happy to help answer any questions you may have.
How Much Can I Sell my Whole Life Insurance Policy For?
Can you sell your life insurance policy for a great amount? How much you can receive from your whole life insurance policy greatly depends on the buyer, the policy’s face value, and the cash value.
Before you sell your life insurance policy there are some important things to know first. Generally, if you are over 75 and have a policy with a face value of at least $150,000, you may be eligible to sell your policy for cash. However, many factors play into how much you will receive.
Some life insurance policies may be worth more than others due to the type of policy, cash value, and death benefits. For example, a life insurance policy with a higher face value and cash value will likely sell for more than a life insurance policy with no cash value.
What Type of Whole Life Insurance Policies Have a Cash Value?
Selling life insurance policy to a third party is not necessarily straightforward as not all whole life insurance policies have a cash value, but some do. Permanent life, universal life, indexed universal life, and variable universal life insurance policies are all types of whole life insurance with a cash value.
Permanent Life Insurance Policy
Permanent life insurance policies, such as whole life and universal life, have a cash value that can be used for various purposes. The cash value of a permanent life insurance policy grows tax-deferred and can be used to cover the cost of premiums or withdrawn for other purposes.
Universal Life Insurance Policies
With a universal life policy, the cash value grows tax-deferred and can be used to cover the cost of premiums or withdrawn for other purposes.
Indexed Universal Life Insurance Policies
Indexed universal life insurance policies offer the potential for cash value growth based on the performance of a stock market index, such as the S&P 500. The cash value of a variable universal life policy can fluctuate based on the performance of the underlying investment account.
Variable Universal Life Insurance Policies
Variable universal life insurance policies offer the potential for cash value growth, but the cash value can fluctuate based on the performance of the underlying investment account.
Getting More Money From Your Whole Life Insurance Policy Through a Life Settlement
You may want to consider a life settlement to get more money from selling your whole life insurance policy.
Some factors that help to get more for the premium you receive if you sell your life insurance policy for cash are:
- If your policy has a high face value
- Your age and health
A life settlement is when you sell your life insurance policy to a third party for more than the surrender value but less than the death benefit.
Getting More Money From Your Whole Life Insurance Policy With a Viatical Settlement
When to sell life insurance policy at the right time is a difficult moment to recognize. You may be eligible for a viatical settlement if you have a life-threatening illness and thus able to give yourself more options. A viatical settlement is when you sell your life insurance policy to a third party for more than the surrender value but less than the death benefit.
The money you receive from a viatical settlement can be used to pay for medical bills, other medical expenses, living expenses, other costs associated with a serious illness, or give you peace of mind with a “safety net.”
Generally, you will get more money by selling your insurance policy with a viatical settlement than a life settlement.
Contact American Life Fund
If you’re considering selling your whole life insurance policy, American Life Fund can help. Many members of the public have come asking “can I sell my life insurance policy?”. We are a leading provider of life settlements and viatical settlements. We have helped thousands of people sell their life insurance policies for cash and can have you an offer in just a few days!
Selling Whole Life Insurance Policy Pros And Cons.
There are advantages and disadvantages to selling whole life insurance policies. Be sure to consider each as it may apply to your situation.
Pros to Selling a Whole Life Insurance Policy:
There are a few pros to selling a whole life insurance policy.
You can get immediate cash liquidity by selling your policy. This is especially beneficial if you need the money for an emergency or if you’re in financial trouble.
You can get a higher payout for your policy than if you were to surrender it to the insurance company.
Some of The Cons Include:
Before making a decision, you should be aware of a few potential drawbacks to selling your whole life insurance policy.
If you sell it, you may not get the full death benefit from the policy.
If you are selling as a life settlement, you may have to pay taxes on any gains from the sale of the policy. This may not be the case for a viatical settlement.
Selling Whole Life Insurance Policy FAQs
The idea of selling a life insurance policy may be new to you, and you likely have some questions. Here are some of the most frequently asked questions about selling whole life insurance policies.
Can I Sell my Whole Life Insurance Policy if I Have a Loan?
Yes, you can sell your whole life insurance policy even if you have a loan. The sale proceeds will pay off the loan, and you will receive the rest in cash.
What if I Have a Term Life Insurance Policy?
You can also sell a term life insurance policy.
What is The Difference Between a Life Settlement And a Viatical Settlement?
A life settlement is when you sell your life insurance policy to a third party for more than the surrender value but less than the death benefit. A viatical settlement is when you sell your life insurance policy for cash to a third party for more than the surrender value but less than the death benefit. The difference is that the policyholder is seriously ill with a viatical settlement.
Can I Sell my Whole Life Insurance Policy if I’m Healthy?
Yes, you can sell your whole life insurance policy if you’re healthy. However, you will generally get more money from the sale if you have a serious illness because fewer premium payments are involved.
Will I Lose The Death Benefit if I Sell my Whole Life Insurance Policy?
Yes, if you sell your policy, you and your beneficiaries no longer get the death benefit.
Is Selling Your Whole Life Insurance Policy Worth it?
This is a difficult question because it depends on each situation. Selling your life insurance policy is something that needs to be discussed with professionals and your family. You should contact us to discuss your options and see if selling your policy is right for you.
Do I Have to Pay Taxes When Selling a Whole Life Insurance Policy?
To sell life insurance policy for cash means that you are receiving income. There is a good chance that you will have to pay taxes on any gains from the sale of the policy.
Generally, if you are attempting to sell your whole life insurance policy as a life settlement, there will be taxes that must be paid. However, the proceeds are often tax-free if you sell your policy as a viatical settlement.
It would be best to speak with a tax advisor to determine if you will owe taxes on the sale of your policy.
Is Surrendering Better Than Cashing Out a Whole Life Insurance Policy?
This is another difficult question to answer as it depends on each situation. As a general rule, cashing out a whole life insurance policy will give you more money than surrendering the policy. This is because you are selling the policy for its full death benefit, which is typically more than the cash surrender value.
You should speak with a life settlement company to discuss your options and see if selling your policy is right for you.
What Else Can I do With a Whole Life Insurance Policy Other Than Selling it or Surrendering it?
Other options are available if you do not want to sell or surrender your whole life insurance policy. You can keep the policy and continue paying the premiums, borrow against the cash value of the policy, or use the policy as collateral for a loan.
Each option has pros and cons that you should consider before making a decision.
Can I Sell Part of a Whole Life Insurance Policy?
To sell a life insurance policy or part of a life insurance policy? that is the question! Generally, you can sell part of a life insurance policy. This is called a partial sale or split-dollar arrangement. With a partial sale, you sell a portion of the death benefit to a third party in exchange for a lump sum of cash.
The buyer then becomes the partial owner of the policy and will receive a portion of the death benefit when you die.
Will I Still Qualify For Another Life Insurance Policy if I Sell my Current One?
This is a difficult question because it depends on each situation. You should speak with a life insurance company to discuss your options and see if you will still qualify for another life insurance policy.
Is Selling my Whole Life Insurance Policy Right For me?
Selling your whole life insurance policy is a big decision, and it’s important to ensure that you’re doing what’s best for you and your family.
Sell Whole Life Insurance Policy – Summarized.
Selling life insurance policy to a third party is an option people make for a variety of reasons. You can sell a whole life insurance policy for cash, but it’s important to consider all the pros and cons before deciding. Many factors play into how much you will receive from your policy, such as the face value, cash value, and death benefits.
If you still feel unsure about how to sell your life insurance policy then you should speak with a financial advisor to discuss your options and see if selling your policy is right for you.
If you are considering selling your life insurance for cash, contact us at American Life Fund to see how we can help!
