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Sale Of A Life Insurance Policy - Frequently Asked Questions

Do I Have To Sell All Of My Policy Or Can I Sell Part Of It?

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You may be able to sell your life insurance policy in parts.

First find out what the minimum amount of death benefit is required for purchasing companies that are interested in your particular situation.

Start by asking your life insurance company to divide the policy into several replacement policies. Be sure to confirm with the insurance company that the new policies will be deemed to replace your existing policy so the issue dates of the new policies are the same as the issue date of your existing policy. This avoids the imposition of a new suicide and/or contestable period.

If the insurance company won't divide your policy, many purchasing companies will agree to purchase part of an undivided policy. The simplest method of accomplishing this is to transfer title to the whole policy to the purchaser. You keep the right to name the beneficiary for the difference between the amount you sell and the death benefit. (If you use this method, you can't go directly to the life insurance company when you want to change your beneficiary for the part of the insurance you continue to own. You will have to rely on the purchaser to inform the life insurance company of the change. It is also advisable to get the purchaser to agree to inform you before any decisions are made about the policy so you can have a say in the portion that you still own.

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