The life settlement industry consists of companies that specialize in purchasing life insurance policies from policyholders who no longer need them. If you’re looking for companies that buy existing life insurance policies, look no further.
We’re going to walk you through everything you need to know about who buys insurance policies, selling your life insurance policy, and what kind of companies buy existing life insurance policies.
Quick Read:
- Decide between life settlements for healthy seniors or viatical settlements for those with life-threatening illnesses.
- Choose a reputable company for a smooth selling process and maximum payout.
- Selling your policy can be straightforward with the right partner, guaranteeing a stress-free experience.
- Reach out to reputable providers to explore your options and secure a settlement that meets your needs.
Can Companies Buy My Life Insurance Policy?
Yes! Because your life insurance policy is considered an asset that you own, you have the option to sell it.
There are two main ways of selling your life insurance policy: life settlements and viatical settlements .
With both life settlements and viatical settlements, you sell your existing life insurance policy to a third-party buyer in exchange for a lump sum cash payment. The buyer then takes over the responsibility of paying the premiums on the policy. In return, they become entitled to the policy’s death benefit.
While the process of selling your life insurance through a life or viatical settlement is largely the same, there are also some key differences.
Take a look at the information below to learn more about the differences and similarities between selling your life insurance through a life settlement and selling it through a viatical settlement.
Understanding Life Settlements for Life Insurance Policies
- For healthy seniors, age 75 or older, looking to cash out on their life insurance policies now.
- Eligibility requirements include: the insured’s age, policy minimum, etc.
- Payout is typically more than the cash surrender value of the policy, but less than the life insurance proceeds.
- The exact figures will depend on the buyer.
Viatical Settlements: A Guide for Policyholders
- Designed specifically for policyholders who have any of the following, and are looking to cash out on their life insurance policies now:
- Life-threatening illness
- Reduced life expectancy
- Chronic health issues
- There are certain additional eligibility requirements, including policy minimum
- Payout is typically more than the cash surrender value of the policy, but less than the death benefit.
- Payouts vary but can be as high as 50-70% of the policy’s face value.
- Viatical settlements are TAX-FREE and non-regulated.
Types of Companies That Buy Life Insurance Policies
Who buys life insurance policies? The two main types of companies that purchase life insurance policies are a life settlement company and viatical settlement companies.
Choosing the Right Company for Selling Your Life Insurance Policy
Life settlement companies specialize in senior life settlements.
Life Settlement Companies
These companies purchase policies primarily from seniors who no longer need their life insurance. They specialize in valuing and buying these policies, often offering more than the cash surrender value but less than the death benefit. For industry standards and consumer information, refer to the National Association of Insurance Commissioners (NAIC).
Viatical Settlement Companies
When considering viatical settlements, working directly with companies like American Life Fund offers distinct advantages over brokers. Here’s why:
No Brokerage Fees: Unlike brokers who act as intermediaries, companies like American Life Fund work directly with policy owners. This means you won’t have to worry about paying hefty brokerage fees or commissions, allowing you to keep more of your money.
American Life Fund Benefits:
- Offers the highest payouts in the industry, maximizing returns for policyholders.
- Streamlined and efficient sale process, ensuring quick access to funds when needed most.
- Exceptional customer service and support, guiding clients through every step of the process with care and expertise.
At American Life Fund, we prioritize your needs to ensure a stress-free experience. By working directly with us, you can trust that you’ll receive the best quality offer for your policy without unnecessary fees or complications.
Read more about how we can help you!
Licensing Requirements For Companies Buying Life Insurance Policies
In order for a provider or company to buy life insurance, they must be certified as a licensed insurance professional for a minimum of 1 year. Some states also require certain training courses be taken as well.
- Approximately 70% of states in the U.S. mandate that life settlement brokers and providers be licensed.
- Some states also require a specific number of hours in training related to ethical business practices and consumer protection laws.
- The National Association of Insurance Commissioners (NAIC) provides a model act that sets out a framework for state regulation of life settlements, which includes licensing requirements and standards for transparency and fairness in transactions.
What Type of Company Should I Sell my Life Insurance Policy to?
Deciding between a life settlement and a viatical settlement hinges on your individual circumstances and eligibility criteria for each type of settlement.
Life Settlements:
- Ideal for healthy seniors aged 75 or older.
- Involves selling your life insurance policy to a company for a lump sum payment.
- Typically pursued by individuals who no longer need or can afford their policy.
Viatical Settlements:
- Suited for individuals living with a life-threatening illness.
- Involves selling your life insurance policy to a company for an immediate cash payout.
- Often chosen by those seeking financial support for medical expenses or for living expenses.
The choice of whether to sell your life insurance to a life settlement or a viatical settlement company depends largely on whether or not you meet the criteria and eligibility requirements for that specific type of settlement.
Will I Qualify to Sell my Policy?
There are many different reasons a person may choose to sell their life insurance policy. Whether you have a financial emergency, need more money for retirement, don’t want to keep up the premiums, or simply just want cash now, you may qualify to sell your life insurance policy through either a life settlement or viatical settlement.
Here at American Life Fund, we are committed to delivering high-quality service and providing fair, generous viatical settlement offers to clients like you.
We are a viatical settlement company that specializes in working with patients who have been diagnosed and are living with a serious illness, which means that we are experts when it comes to managing cases with care and compassion.
Because we believe you deserve cash now, we are committed to high offers with quick turnaround times.
If you’re interested in seeing if you qualify for a viatical settlement, fill out your quick free form and get in touch with us!
Qualifying For a Life Settlement
Life settlements are for otherwise healthy seniors, age 75 or older, who are looking to cash out on their life insurance policy early.
The policyholder must have owned their current life insurance policy for 2 years, and it must have a face-value of at least $150,000.
Qualifying for a Viatical Settlement
As we mentioned earlier, in order to qualify for a viatical settlement, you must have been diagnosed with a life-threatening illness. Unlike with life settlements, there are no age requirements to qualify for a viatical settlement.
You’ll also need to have held your current life insurance policy for 2 or more years, and your policy will need to have a face-value minimum of $150,000. Almost all policy types are eligible to sell. Whether you have whole life, term life, universal, or group, you could be eligible for a viatical settlement.
If you meet these criteria, there’s a good chance you may be able to cash in your life insurance policy for a generous viatical settlement.
When considering selling your life insurance policy, you have options. Life settlements and viatical settlements both offer options to trade your policy for a lump sum cash payout, depending on your health and circumstances. Life settlements are for healthy seniors aged 75 or older, while viatical settlements are designed for those facing life-threatening illnesses.
At American Life Fund, we understand the challenges you face. That’s why we stand by your side as a financial guide and resource during this difficult time. Our commitment to you guarantees a stress-free experience and maximum returns on your policy. Don’t just take our word for it, see what our clients have to say about us.
How much do you get for selling a term life insurance policy?
If you elect to sell your term life insurance through a viatical settlement, you can expect to receive about 50-70% of the policy’s face-value, depending on multiple factors. Viatical settlement calculators offer a quick and easy way to estimate the potential value of your life insurance policy in a viatical settlement.
Can I cash out my term life insurance?
You cannot specifically “cash out” term life insurance, because it does not have a cash value—only permanent life insurance policies carry a cash value. However, with term life insurance you may still qualify to receive a cash payout through a viatical settlement, assuming you meet the other criteria for viaticals.
You can see if you qualify for a viatical settlement by filling out our quick, free form here.
Is it legal to sell your life insurance policy?
Yes, it is absolutely legal to sell your life insurance policy through a life settlement or a viatical settlement to life insurance settlement companies.
How do I know if I qualify for a life settlement or viatical settlement?
Eligibility criteria vary between life settlement and viatical settlement companies. Generally, healthy seniors aged 75 or older qualify for life settlements, while individuals with life-threatening illnesses may qualify for viatical settlements.
What happens to my life insurance policy after selling it through a settlement?
Once you sell your life insurance policy through a settlement, the policy is transferred to the purchasing company, and you no longer have any obligations associated with it such as premium costs. In return, you receive a lump-sum, cash payment in exchange for the ownership of your policy.
How long does the life settlement process take?
The timeline for the life settlement process can vary depending on factors such as the complexity of your policy and the company you choose to work with. Generally, it can take a few weeks to complete the process from start to finish.
Are there any fees associated with selling my life insurance policy through a settlement?
Some settlement companies may charge administrative fees or processing fees. It’s important to review the terms and conditions carefully and ask about any fees upfront before proceeding with the settlement. However, at American Life Fund, there are fees involved with selling your policy through us.
Can I purchase a life insurance policy after selling one through a settlement?
Yes, you can purchase a new life insurance policy after selling one through a settlement if you meet the eligibility requirements set by the insurance company. However, it’s essential to consider your current health status and financial needs before purchasing a new policy.
