Can I Sell My Term Policy?

In the Life Settlement http://en.wikipedia.org/wiki/Life_settlement arena there are some ways to sell your term policies. Some of the basic stipulations are…

1. Insured person Needs to be age 65 or older.

2. Need to have a buyer…like a bank.

3. The policy Needs to be convertible.

What these banks are actually doing is buying the term policy from you then converting it to some sort of Universal Life product (No-Lapse UL). They will then pay the premiums on the new policy. When you die they are now the beneficiaries of the policy.

In today’s market you can sell these policies for anything from 1% to 30% of the face value based on life expectancy.

Example

$1,000,000 Death benefit could sell for 25% which equalls $250,000

There are a lot of people out there who think their term policies will just expire and they are not aware of this option. Some people are now buying policies that are convertible into their 70′s and hoping to be able to sell them at that point as part of their retirement income.

Example

A healthy 52 year old male buys a 20 year term policy of 1 million of death benefit for around $2,500 per year. He then sells it at age 72 for $250,000. His total out of pocket was $2,500 Xs 20 years= $50,000.

If you are over 45 years of age…You may want to look into this.

Life Settlements

This is probably the hottest and most debated topic in the Life Insurance industry today. Based on my research and understanding…this concept can and does work very well in certain situations. There are always going to be those who push the limits and give things a bad name. There are many articles about how good Life Settlements are and again they can be. Here is an article of basic warning about the speculation behind this investment. Another big piece of this is called Premium Financing.

http://www.nuwireinvestor.com/articles/life-settlements-what-investors-should-know-51429.aspx