When you purchase a universal life insurance policy, you are making a long-term investment in your future.
These life insurance policies offer a wide range of benefits and can be very helpful for providing financial security for your loved ones. However, due to chronic or life-threatening illness, there may come a time when you decide that you want and can sell universal life insurance policy for Cash.
If you have a universal life insurance policy and are looking for a way to cash it out, this article will explain why a life settlement or viatical settlement may be right for you.
What is a Universal Life Insurance Policy?
Universal life insurance is a type of permanent life insurance policy. It is different from other types of permanent life insurance policies, such as whole life and variable life, in that the premium and death benefit can be adjusted to meet the policyholder’s needs. The policyholder has the flexibility to change the amount of the premium and the death benefit, within certain limits.
This makes universal life insurance a good option for those who want the security of a permanent life insurance policy but who also want the flexibility to adjust their premiums and death benefit to suit their changing needs.
Can You Sell Universal Life Insurance Policy For Cash?
Universal life insurance policies are designed to provide lifetime coverage, and they can be sold for cash if the policyholder no longer needs the coverage. When you sell universal life insurance policy, the buyer will take over the payments on the policy, and the seller will receive a large, lump-sum cash portion of the policy in return.
This can be a good option for policyholders who need money quickly or want to free up money currently being used to pay for premiums.
However, there are some things to consider before selling a universal life insurance policy.
First, you should ensure you are getting a fair price for the policy.
Secondly, you should be aware that once you sell a universal life policy, you will no longer have coverage under that policy. If something happens and you need to use the policy for coverage, you will not be able to do so.
Finally, it is important to remember that when you sell your flexible universal life insurance policy, you are essentially cashing in your investment in that policy so be sure to weigh all of your options before making a decision.
How Much is my Universal Life Insurance Policy Worth?
The surrender value of your Universal life insurance policy will depend on several factors, such as the face value of the policy, your age, health status, and your policy type.
A life settlement company such as us at American Life Fund can work with you to determine the fair market value of your universal life insurance policy.
Can I Withdraw Money From Universal Life Insurance Policies?
Yes, this is possible. A policy owner of universal life insurance has the ability to access their cash in the form of either a life insurance loan, life settlement, or viatical settlement.
It is important to remember that withdrawals from a policy’s cash value reduce its death benefit and have different tax consequences.
Owners of universal life insurance can borrow against the cash value of their policies, but the loan must be paid back or the loan will reduce the policy’s death benefit by the amount of outstanding debt. If a policy is still in force when a loan is outstanding, there might be taxes owed. There is also interest associated with taking a loan out from your policy.
A life or viatical settlement may be a better option for policyholders who wish to access the value of their coverage.
Who is Eligible to Sell a Universal Life Insurance Policy?
Generally, a universal life insurance policyholder must have a serious illness such as cancer, ALS, Alzheimer’s, or heart disease along with a policy of $150,000 or more in order to sell it.
If the insured doesn’t have a serious illness, they must be 75 or older with a universal life insurance policy of $150,000 or more.
When Should I Consider Selling my Universal Life Insurance Policy?
There is no easy answer to this question, as it depends on a variety of factors specific to each individual policy and situation. In general, however, there are a few times when selling a universal life insurance policy may be the right decision.
If the policy has stopped earning interest and the premiums are no longer affordable, it may be time to sell. Another reason to sell might be if the policyholder needs access to their policy’s funds immediately and does not want to wait for the policy to mature. Finally, selling may be the best option if the policyholder’s financial situation or health changes significantly.
Ultimately, whether or not to sell a universal life insurance policy is a personal decision that should be made after considering all of the pros and cons.
Benefits of Selling Your Universal Life Insurance Policy
There are several reasons why selling your universal life insurance policy might be your best decision.
Get Enough Cash to Cover Medical Expenses.
By selling your universal life insurance policy, you can get a lump sum of cash that can be used to cover bills, food, transportation, or any other costs associated with your illness.
Possibility of Getting More Than The Cash Value of Your Policy.
If you have a universal life insurance policy with a cash value, you may be able to sell it for significantly more than the cash value.
No Responsibility Over Premium Monthly Payments.
Selling your universal life insurance policy will ease the financial burden of paying a monthly premium on your policy.
Getting More Money From Your Universal Life Insurance Policy Through a Viatical Settlement
When a person is diagnosed with a life-threatening illness, they often have to face difficult decisions about their future, including their finances. One option that may be available to them is a viatical settlement. A viatical settlement is when a person with a life insurance policy sells the policy to a viatical settlement company in exchange for a lump sum of money. This can be a helpful option for people who need the money to pay for medical expenses or to settle debts.
There are many companies that offer viatical settlements, and it is important to do your research before choosing one. We at American Life Fund are a viatical settlement company that is here to help you in your time of need. Click here for a free estimate on your universal life insurance policy settlement.
Selling a Universal Life Insurance Policy With a Life Settlement
You may want to consider selling your universal life insurance policy when you reach a certain age.
This can be a great option for those who are no longer interested in owning a life insurance policy or can’t afford the premiums. It’s also a good way to get some extra money if you’re facing financial difficulties.
If you’re considering selling your life insurance policy, consult with an experienced life settlement company like us here at American Life Fund.
Frequently Asked Questions
Do I Have to Pay Taxes on my Viatical Proceeds if I Sell my Universal Life Insurance Policy?
No. Viatical settlements are usually not taxed.
What Should I do Before Applying For a Viatical Settlement?
Before applying for a viatical settlement, you can do a few things.
- Check to see whether you qualify for a viatical settlement.
- Gather basic policy information.
- Decide how you’ll utilize the cash.
In Conclusion
Selling your universal life insurance policy may be a difficult decision. However, it could provide you or your family with much-needed financial assistance if your health deteriorates or you need cash quickly. To get an offer on your universal life insurance policy, contact us for a no-obligation estimate for your policy.
Viatical and life settlement companies like American Life Fund can help by providing you with a lump sum of cash in exchange for your life insurance policy. Call us today to learn more about how we can help you.
