Why Do You Sell The Life Insurance Policy?
- You may no longer be able to afford your premium payments.
- Your life insurance policy was purchased for a specific need – now the policy is no longer needed.
- Cash is need for living expenses.
- Cash is need for Long Term Care expenses.
- Cash is needed for other investments.
Where Do You Sell The Life Insurance Policy?
The life insurance policy is sold in the life settlement marketplace which is an informal group of institutional buyers, hedge funds, private equity funds, large financial institutions, high net worth investors, etc…
Factors Affecting The Policy Sales Price.
There are four main factors that determine the sales price of a policy:
- The age and health condition of the person insured.
- The “cost to carry” the policy in future years. “Cost to Carry” means the annual buyer’s cost to keep the existing policy in force for future years.
- The size of the policy being purchased (the death benefit).
- The liquidity of the buyers’ market. At any given time does the buyers’ market have a high surplus of cash to invest in new life insurance purchases.
Before You Sell
Take a step back and review your decision to sell your policy. The death benefit to the policy beneficiary will always be greater than the purchase price of the policy. Does selling the policy still meet your short term and long term goals?