- How can I use my life insurance as a cash settlement?
- December 12, 2013
Given the many problems that life can offer from time to time, there may be circumstances that occur when you consider selling your policy. For example, California Department of Insurance (CDI) notes that people who do not have disability insurance and are out of work could end up burning through their savings accounts. If you find yourself in this situation, you may consider selling your life insurance in order to help make ends meet.
According to CDI, a cash settlement for life insurance can help provide for the following:
• Continuing health care
• Bills or debts
• Making up for lost income
• Keeping up with a certain quality of life
• Financial independence
Still, you want to be careful when deciding whether to sell your life insurance policy. Doing so could put your family’s financial standing at risk if you die. Furthermore, depending on your age and other factors, it may be difficult to get a life insurance policy in the future.
First of all, you need to determine if your policy is a candidate for a settlement. There usually is a period of two years when the policy is new that it can be contested. Double check with your life insurance company that your policy meets certain criteria before a settlement can be determined.
Many factors such as age, health status, rating of the insurance company and how many policy payments you still need to make, will depend greatly on the amount of the money you can receive in return.
Find an experienced life insurance professional that can help you with any type of settlement. They can be confusing and you want to review in detail your options with an advisor. Contact your state life insurance division for more information. Recent reports also have revealed that the market for selling life insurance may open consumers up to fraud.
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