Sell your life insurance policy for cash.
If you have a life insurance policy and no longer need the insurance or can no longer afford the premiums on it or need emergency money, you can cash the policy out. Cash value life insurance policy is definitely worth some money, while term life might or might not be worth anything. You can use the money for anything you want, even getting a cheaper life insurance.
As with any financial matter, beware of scams. Here are some tips to help you make the best decisions when trying to get cash for your life insurance policy.
Instructions
1. Contact your life insurance company and find out the cash surrender value of your policy. This is the minimum amount that you can expect to get. You should be able to get more than this minimum, but less than the full death benefit on your policy.
2. Check whether your life insurance policy includes an accelerated benefits provision, and whether you qualify for it.
3. Call the office of your State Insurance Commissioner - type in "insurance commissioner" followed by the name of your state in Google to find the contact info. Check whether life insurance settlement brokers are required to be licensed in your state. Some states don't impose any regulations on life insurance settlement companies at all, and thus all kinds of abuses can result from that. In addition, find out what tax laws apply to life insurance settlements in your state - some states tax them, some don't.
4. Get quotes from at least several life insurance settlement companies in order to get the best deal. You should be able to get more than your cash surrender value. Be very careful as there are a lot of scams out there. Before you give any personal information, check with the State Insurance Commissioner if there have been any complaints filed against a particular company.
5. Consider setting up a consultation with a financial adviser. Cashing a life insurance policy is a really complicated process, and you could easily make costly mistakes. In particular, you should find out how much tax you will have to pay on the settlement money. The consultation fee would most likely be money well spent.
6. Finally, once you have selected the settlement company, demand an escrow account to be set up at an independent bank, before you sign any papers. That way you can make sure that the company does indeed have the cash to cover the offer they made for your life insurance policy settlement.
