Can I sell my life insurance?
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Asked July 27, 2010
There are three ways to sell your life insurance policy. The most common form, called a cash out, isn't really selling the policy, but simply closing it out in exchange for the accrued value paid into the policy. This can be done with most whole life insurance policies at any time after the policy has gone into effect, and the payout will be commensurate with the amount of premiums invested.
The next way to sell a life insurance policy is called a life settlement. In this instance, the policy is sold to a third party who pays more than the accrued cash value but less than the death benefit. Investors will bid against one another for this type of loan, and the payout is based on a number of factors including your age, health, and living circumstances. If you want to use the life settlement option, there are even brokers who can market the policy to a variety of different investors.
Finally, you can sell a life insurance policy using the viatical method. This type of policy sale usually involves a person who has developed a serious or even terminal illness. It allows the person to sell the policy for more than the accrued value in the account, but less than the death benefit pay out. To qualify for a viatical insurance policy sale you will need to provide documentation, such as doctor's statements, that your condition and life expectancy have been significantly altered by an illness that was not pre-existing. For example, if you were to develop the AIDS/HIV virus after having the policy in effect for 5 years, it would be possible to sell it on the viatical market to get funding for treatments and other expenses.
Answered July 27, 2010 by Anonymous