Given the variety of problems that life can throw at you, there may be times when you consider selling your policy. For example, the California Department of Insurance (CDI) warns that people without disability insurance who are out of work risk depleting their savings accounts. If you find yourself in this situation, you might think about selling your life insurance to help you make ends meet.
A cash settlement for life insurance, according to CDI, can help provide for the following:
- Continuing medical care
- Bills or debts
- Making up for lost income
- Maintaining a certain standard of living
- Financial independence
However, you should exercise caution when deciding whether to sell your life insurance policy. If you die, your family’s financial situation may be jeopardized. Furthermore, depending on your age and other factors, obtaining a life insurance policy in the future may be difficult.
First and foremost, you must determine whether your policy is eligible for a settlement. When a policy is new, it usually has a two-year window in which it can be challenged. Before determining a settlement, double-check with your life insurance company that your policy meets certain criteria.
Many factors, such as age, health status, an insurance company rating, and how many policy payments you still need to make, will have a significant impact on the amount of money you can receive in return.
Find a knowledgeable life insurance professional who can assist you with any type of settlement. They can be perplexing, and you should discuss your options thoroughly with an advisor. For more information, contact your state’s life insurance division. According to recent reports, the market for selling life insurance may expose consumers to fraud.