If the question comes up, “can you sell your life insurance” in the secondary market, then our article will help you understand the core concept involved and thus, you can decide accordingly.
Generally, there are two types of settlement: life settlement and viatical settlement; you can choose accordingly based on your eligibility, requirement and other such related factors.
Generally, in both the life settlement as well as viatical settlement, the factors checked for your qualification includes your age, life expectancy, possible cure if you have any disease, your premium cost, face value, cash value, and your location.
The very first question and factor to be considered in any type of settlement is your age; the age will bring out other rooted factors like any existing diseases and its correlation to your age. Therefore, this will be helpful in calculating the ultimate factor which decides the value of your policy, your life expectancy.
Usually, the concept is the higher your age, the higher your policy will be rated. This is because it’s a general conception among purchasers that a person above 65 years can die earlier compared to the persons below 30 years of age. This means that the earlier the seller dies, the earlier will the buyer be able to access the death benefit. Also, the fact that on account of the seller’s death, the payment of the premiums can be stopped; many purchasers prefer such an arrangement.
It’s important to note that if you’re of age, which is considered to be young, like below 30 or 35, you can opt for a life settlement. This is because viatical settlements are usually done by senior citizens and those who have a terminal illness. If you’re young with optimum health and opt for a viatical settlement, you may become ineligible for Medicaids in future.
In addition to age, the next most important factor is life expectancy; this means your estimated years of life. Commonly, this arises from the concept that the older you are, the more prone to illnesses you will be as compared to your younger self. Hence, the lower your life expectancy is, the higher your policy will be priced. In addition, if you’re young and have a terminal illness, then the same concept applies. However, it’s important to note that if your disease can be cured to the point that your life expectancy can be improved, then the rating will be decreased accordingly. For example, diabetes can be cured more easily as compared to blood cancer.
To settle on a deal and get a higher rating on policy, you will require the following:
- Your past records: Make sure your past records are clean; this means that if you have traded your previous policy or policies earlier, it might affect your current policy rating. This arises from various technical as well as the psychological factors of the buyers.
- Your medical reports: On production of such reports, your life expectancy will be calculated based on the same and thus, your policy will be rated accordingly.
- Your past premium payment records: This helps the buyer understand whether you have regularly been paying and if you were irregular in payment, whether any penalty is to be paid by the buyer. Also, if you have stopped paying the premiums for a long period of time, the benefit might be substantially less, and the rating on your policy tends to decrease.
- Other related requirements: This includes your identity proof, address proof, and other such proofs which you will be required to produce on demand of the buyers.
CHOOSING A BROKER OR AN AGENT COMPANY
In addition to answering the question, “can you sell your life insurance?” there are two other popular options available; hiring a broker or an agent company. On choosing one, make sure to check the following guidelines for a more effective and authentic transaction experience.
- They should not be an indirect beneficiary: This means that you need to investigate whether such agent has principle interest in any other company or if they are owners of any related purchasing company. In such cases, you may be directed to sell your policy to their other company without your knowledge, and thus, the agent will become the principal buyer as well; this transaction is illegal in many places.
- Transparency is the key: Make sure to obtain information such as their previous criminal record, pending litigation or legal issues, their existing offers in the company, and other such matters. This will help you understand the existing atmosphere in the company or in the agent’s service. In addition, make sure to check whether such entities have their license or not; the most authentic license is the full license.
- Member of LISA: This is an association where life insurance dealers are chosen after a series of tests to assist and help sellers like you. Their presence will explain their qualification level. However, make sure to check their rank in the association, as this will help you understand the extent of their powers.