Summary
There is no "best way" to sell a life insurance policy. What is best for you depends on how much work you are willing to do and how good you are at negotiating.
Whether you are considering selling a life insurance policy as a Viatical Settlement or a Living (Senior) Settlement, you can either deal with purchasing companies directly, or work through a broker. If you are age 70 or older, you may also have a choice whether to sell your policy as a Viatical Settlement or a Life/Senior Settlement.
In either case, get offers from at least three different purchasing companies. Preferably, get offers from even more companies.
For more information, see:
- Should I Use A Broker Or Work Directly With Purchasing Companies?
- Should I Do A Viatical Settlement or a Life/Senior Settlement?
- How Do I Locate Purchasing Companies And/Or Brokers?
- Tips If You Use A Broker To Help Sell Your Life Insurance Policy
- The Process Of Selling A Life Insurance Policy
To Learn More
Should I Do A Viatical Settlement or a Life/Senior Settlement?
If you are age 70 or over, you may have a choice whether you want to sell your policy as a viatical settlement or a life settlement. In both situations, purchasing companies will look to see whether you have a health condition which shortens your life expectancy.
Rather than look at the situation as either a Viatical Settlement or a Life Settlement, try for both. You’ll quickly find out which category will net you the most money.
For information about selling a life insurance policy, click here.
Should I Use A Broker Or Work Directly With Purchasing Companies?
If you are considering selling a policy yourself, look at what is involved in the sale process to determine if you are able and willing to take care of the process yourself. Understand that once you approach a purchasing company, it will be in the company's interest to take over as much of the work as it can to help convince you to sell your policy to that purchaser.
Brokers are supposed to work on your side, with only your interests at heart. The reality is often that a broker's interest is purely personal: from which purchaser can they get the highest commission?
If you work through a broker, ask for the amount of their commission in writing. Confirm what you are told by the broker with the companies you're interested in working with.
Keep in mind that the amount of commission a broker receives is negotiable at any time during the transaction. If you want to increase the amount of money you will receive, ask if the broker will decrease his or her commission.
Ultimately, in addition to looking at the best price, consider whether a potential purchaser also provides the other matters you care about -- such as the way confidentiality is guaranteed or how the company keeps with you after a sale.
To Learn More
More Information
The Process Of Selling A Life Insurance PolicyHow Do I Locate Purchasing Companies And/Or Brokers?
To locate a broker and/or a Viatical Settlement or Life Settlement purchaser, see the web site for the Life Insurance Settlement Association: www.lisa.org .
To Learn More
Tips If You Use A Broker To Help Sell Your Life Insurance Policy
Look for a reputable broker. Life Insurance Settlement Association, www.lisassociation.org is a good place to start. You can check with your state insurance department to find out if broker licensing is required. (For contact information, see: www.naic.org ). If licensing is required, are there complaints against the individual?
Ask for a disclosure form which tells you who is getting money relating to your policy and how much money each person or company is getting. Don't just get percentages. (You can obtain a copy of a form from the Institutional Life Markets Association (www.lifemarketassociation.org ). The non-profit organization requires use of the form for all brokers who want to do business with their purchasing members).
Don't let the broker or anyone else should charge a commission against the part of the payment equal to the cash value in the policy, if any. That money already belongs to you.
Ask who will be the ultimate owner of your policy. Ask how often and by what means the company contacts you after a sale (to be sure you are still alive).
Satisfy your privacy concerns. For example, ask which companies the broker will tell about your personal information. Ask how any companies you're considering selling a policy to handle privacy issues.
Before accepting an offer, show it to an independent financial advisor who has no connection with any of the people or companies involved in the proposed purchase. For a hefty fee, www.whatsmypolicyworth.com will analyze the details of the situation and provide an idea of what everyone in the process should receive.