Content Overview 
- Summary
- History Of Selling Life Insurance Policies By Owners
- What Is A Sale Of A Life Insurance Policy?
- Who Can Sell A Life Insurance Policy?
- What Kind Of Life Insurance Policies Can And Cannot Be Sold?
- How Much Can I Expect To Receive From A Sale Of A Life Insurance Policy?
- Do I Have Any Responsibilities After A Sale Of A Life Insurance Policy?
- Do The Proceeds From A Sale Of A LIfe Insurance Policy Affect Any Other Benefits?
- If You Are In Or Are Considering Filing For Bankruptcy
Sale Of A Life Insurance Policy (Viatical, Life And Senior Settlements)
Summary
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If you have been diagnosed with a serious or life-changing condition, you may be able to obtain cash by selling your life insurance to companies that are not related to life insurance companies. The sale can occur either as a "viatical settlement" or a "life settlement" (which is also known as a "senior settlement.")
A viatical settlement involves the sale of a life insurance policy by someone with a short life expectancy. Age is not a factor in a viatical settlement.
In theory, a life settlement is the sale of a life insurance policy on the life of an insured who is age 60 or older. In reality, purchasers of life settlements also require that the insured has a limited life expectancy of 12 -- 14 years or less.
When considering whether or not to sell a life insurance policy, it is preferable to understand how a sale works and what it means to you -- including possible tax consequences.
While a viatical or life/senior settlement can be very beneficial, the sale process can sometimes be complicated. You can either go through the process yourself or use a broker.
- If you do the process yourself, it is advisable to contact at least two purchasing companies. You will have to go through an interview, supply documentation and then compare offers.
- A broker will contact several settlement companies for you and do the work in exchange for a percentage of the proceeds. According to the NY Times, the commission in 2017 can be up to 30% of the price a company offers.
As of 2017, 43 states have adopted life-settlement regulations, usually requiring that companies be licensed and make consumer disclosures.
For additional information, see:
- History Of Selling Life Insurance Policies By Owners
- What Is A Sale Of A Life Insurance Policy?
- Who Can Sell A Life Insurance Policy?
- What Kind Of Life Insurance Policies Can And Cannot Be Sold?
- How Much Can I Expect To Receive From A Sale Of A Life Insurance Policy?
- Do I Have Any Responsibilities After A Sale Of A Life Insurance Policy?
- Do The Proceeds From A Sale Of A LIfe Insurance Policy Affect Any Other Benefits?
- If You Are In Or Are Considering Filing For Bankruptcy
- The Process Of Selling A Life Insurance Policy
- What Is The Best Way To Sell A Life Insurance Policy?
- Tax Consequences Of A Sale Of A Life Insurance Policy As A Viatical Settlement?
- Frequently Asked Questions
- What if I outlive the time period estimated by the purchaser?
- How do I assure confidentiality if I sell my life insurance?
- What if my life insurance includes a double indemnity provision in the event of death by accident?
- What if my policy includes the right to increase the death benefit?
- Will anyone contact my beneficiary if I sell my life insurance?
- Do I have to sell all of my policy or can I sell part of it?
- Should I remove any cash value from my life insurance policy prior to a sale?
- What if I have a problem with a purchasing company?