How To Sell Your Life Insurance Policy
A life settlement is the financial transaction of an existing life insurance policy to a life settlements buyer for more than its cash surrender value, but less than its death benefit.
The policy owner transfers all or part of the ownership and beneficiary rights to an institutional investment fund.
The insured receives a lump-sum cash payment that can often be 4 to 6 times greater than the cash surrender value in exchange for transferring ownership.
The money belongs entirely to the policy seller and can be spent at their discretion. Life settlements can also include retention of part of the death benefit.
1.
Policy Cash Israel has created a streamlined process to make selling your policy fast. Here is a break down of the method of selling your life insurance policy into 8 simple steps:
Deciding to Sell
Before deciding to sell your policy, the policyholder and their beneficiaries must consciously discuss and weigh out all options before pursuing this option—this means contacting your financial advisor or Policy Cash Israel and looking into all alternatives to ensure that it is the most beneficial solution for you and your family.
There is no cost for this, or any obligation to accept an offer at any time.
2.
Determining Eligibility
Certain specifics determine if an individual will qualify, such as premiums, the life expectancy of the insured, and the death benefit. Policy Cash Israel can let you know if you are qualified for a settlement.
By filling out our Life Settlement Calculator, Policy Cash Israel can determine if you are eligible to sell. If you are eligible, we then shop your request to several of our groups of investors to provide you with a free estimate.
Once you choose to continue with selling your policy, the information disclosed will be used by a medical underwriter who will calculate the insured’s life expectancy, by using medical records to determine exactly how much the policy is worth, at no cost to the insured.
3.
The Offer
Policy Cash Israel would then convey the offer to the insured. The proposal will be more than the surrender value of the policy, but less than the net death benefit.
4.
Acceptance
If the amount offered by the buyer is acceptable to the policy seller, they can choose to accept the offer and request the required documents for review.
5.
Contracts
The buyer generates contracting documents.
These documents record the life settlement transaction and spell out the agreement between the seller and the purchaser. Both parties must sign and notarize the contracts.
6.
Verification
Once the contracts are executed, and all the required documents are received, the verification process begins. Often completed by a third party like a law firm, this verification agent will check that all the contracting forms have been completed correctly. They may also check that the policy is in full force and in good standing with the insurance company.
They will verify that the funds for the purchase are in an escrow account for the policy seller.
7.
Change of Ownership
Subsequently, a request for an ownership change is sent to the insurance carrier. This step ensures that the owner is changed from the current policyholder to the buyer.
8.
Funds Transfer
After the insurance carrier has confirmed that the purchaser is listed as the owner, the escrow agent is instructed to release the funds to the seller. The new owner is now responsible for all premiums, and the seller has received payment for the transaction.
​
This is the last step of the process and concludes the transaction. The insured is then free to use the money received at their discretion.