Devoted to the Insurance industry and all thing related

There might come a time down the road, I’m talking when you’re 65 or older, when you no longer can afford your life insurance premiums or feel that you don’t need life insurance.  Both of these issues are very valid but should have been addressed by your agent from the very beginning of the sales process and also from time to time in annual reviews.  If cost is an issue then talk with your agent about lowering the premium.  This may be an option if you own a permanent life insurance policy.

If you think you no longer need life insurance then the first thing to do is talk with your insurance agent.  They will help you look from a broader perspective before deciding to do away with the policy.  You may think you don’t need insurance any longer but others might suffer if that insurance money is not there to pay for certain expenses.

Regardless if you’re to the point of not wanting to pay premiums anymore or can’t afford the premiums then there are several options for you.  A life settlement is one of those options but not necessarily the right one.  Know that a life insurance settlement is when a third party buys your insurance policy from you “for more than its cash surrender value but less than its net death benefit” according to the Life Insurance Settlement Association (LISA).
The benefits of selling your insurance policy to a third party is that you get back all or at least most of the money you put into the policy.  The other benefit is that “the proceeds are tax-free up to the amount you have paid in premiums during the life of the policy” according to the LISA.  OF course another benefit is that you’re relinquished of all responsibility to pay the premium.  The third party will pay all premiums and also designate a new beneficiary.

A life settlement can also be your last option if your policy is on the verge of lapsing.  Instead of losing all the money you put into the policy sell the policy to a third party and actually get some living benefits out of the deal.

Whether or not a life insurance settlement is good for you or not depends on your specific situation.  Take precautions about which company you decide to use.  Start by searching through the Providers section of the LISA website.  They currently have 142 member companies to choose from.  Depending on where you live you might need to use a broker.  Utilize LISA’s legal resources database to look up information for the state you live in.