Equote - David Livingston

Some people who are holding a term life insurance and other types of insurance plans for that matter get caught in a situation wherein they sell their coverage. Of course, a sane person would not sell such thing if they are not in a dire need. It is a known fact that the primary purpose of life insurance plans is to provide death benefits to the family of the insured. This means that the cash benefit will only be received when the plan holder dies. But when they get in a circumstance when they badly need money, they have the option to sell it. How on earth you can do it? Below are some tips.

• What are the usual reasons to sell? –life insurance policies can be difficult to sustain as the premiums can increase in the long run. There are quite a few reasons why someone sells their policies. One of which is that they no longer need the policy. For instance, if a 20-year term life that a parent bought for the college plan of his only son who just passed away, he would want to sell it because he knew he cannot produce a kid anymore. Sometimes, the policy holders need money in order to pay for medical expenses for a family member with a terminal illness.

• What are the types of plans that you can sell? –aside from term life insurance, there are other types of plans that can be sold. It includes whole life, universal type insurance, variable universal life, annuities, endowments and even convertible term life insurance. There are certain types of term life policies though that cannot be sold just like no medical exam term life insurance. This is because there will be no good market for such type. It would be impractical for someone to buy such type from other person as it will be more expensive unlike if they will purchase one for themselves. 

• Where can you sell your insurance plans? –Viatical companies are the ones which buy the insurance policies being sold by the insured individuals. Depending on the state that you are currently in, you might need to look for a viatical firm that is licensed. Normally, they would buy your policy and will sell it to other people. They usually pay at least 60% of the whole face value of the insurance plan to an insured person who only has a couple of years to live or even less. The lesser the time the person is expected to live, the higher they will be paid.

• How long does it usually take? –depending on how attractive your offer is, it may take a while before your insurance policy is sold. It is strongly recommended that you get at least three term life insurance quotes from different viaticals companies before you seal the deal so that you can have an option to choose the best. There are also other people who may get in the way of settlement, which can lengthen the process of selling all the more. Since such transactions are not treated with utmost confidentiality, your creditor may make a claim. In addition, it may affect your entitlement to some of financial assistance given by the government.

• Will you need your lawyer? –definitely you will need a lawyer not just to ensure that everything will be in place but also for the tax ramifications. There are states that would not require you to pay taxes but there are laws in some states that would not let you get away with your selling without paying taxes. In addition, it may have an impact on the estate settlements. The amount of tax that will be required from you can vary depending on your health. You may be waived or it may be lowered if you are terminally ill.

• Do you have other alternatives? –before you sell your insurance life, obtain the viatical companies’ term life insurance rates on plans such as yours. This is because you may end up in the losing end. Better yet, it will be best to exhaust all other alternatives before deciding to sell your insurance plan. Keep in mind that the security it can provide is like no other unless you have overflowing money. 

Selling your insurance policy should only be your last option. If you do not have any cards left and the need is very immediate, then it will be high time to sell your policy.