Since the economy is not doing so well, many people are out to find any way they possibly can to get some extra cash into their pockets. Many seniors have been trying to figure out how to sell life insurance policy. Didn’t know this was possible? Well it sure is possible and it’s becoming more popular each and every day. Do keep in mind that when you do this, your family will not get any payout when you die, as the death benefits become the property of the company or investor to whom you sell your life settlement.
The life settlement industry is beginning to grow—and at a fast pace. The market is reaching the billions and is becoming more popular each passing year. To sell your life insurance policy, you must usually be at least 65 years of age and have no more than 15 years left to live. In most cases, the life insurance policy death benefit must exceed $100,000, as well.
Are there other ways to use your life insurance policy for cash? Of course! If your policy has cash value, you may decide to withdraw cash from your policy or take out a loan against it.
Withdrawing From Your Policy
Most cash value insurance policies permit you to withdraw funds from your policy. How much you can withdraw depends on the company that issued your life insurance policy and the specific type of life insurance policy that you purchased. If your life insurance policy is not a Modified Endowment Contract, then you can withdraw all the way up to your policy basis without being subjected to taxes.
Taking Out a Loan
Borrowing money from your life insurance policy is a popular choice among seniors. You can use the accumulated cash value in your policy as the collateral against your loan. You may be charged an interest rate for your loan and you have to check your insurance contract to learn what that rate is for your policy. It is not necessary to financially qualify for a loan against your policy. The total loan amount depends on the cash accumulation value of your policy and the specific terms in your life insurance policy contract.
All three options—selling your life insurance policy, withdrawing cash from your policy, or taking out a loan against your policy—are popular as many people are turning to their life insurance policy for cash because of their dire need for the funds. If you are in the same boat, you may want to think about these options, too.