When we talk about selling life insurance policy and getting a life settlement, the most challenging part is the process involved in selling the policy and getting it cashed. It seems pretty complicated, however, doing a little bit of research would make it all easy. With that being said, here’s the process of selling your life insurance policy in exchange for cash.
When you plan to go for a life settlement by selling your policy, there are certain conditions and criteria that you need to analyze. This would give you an idea whether or not you are eligible to get a life settlement in exchange for your life insurance policy. First up, find out what is the type of policy you own and whether it qualifies for a life settlement. Next is to make sure that your policy is at least worth $100,000. Besides that, the age of your policy should account to what your state acknowledges. If all these conditions are met, and you are above the age of 65 years, you are good to go.
Once you have figured the criteria and are qualified for a life settlement, the next step is to conduct research. In order to sell your life insurance policy and get instant cash, you need a third party who buys your life insurance policy. The third party that you sell your policy to can either be a life settlement providing company or a life settlement broker. It is suggested to sell your policy to a life settlement company rather than a broker since brokers look for more profit out of the deal.
Now, the role of the research is to help you find the best life settlement company in your region. For this, you can take help of the people who you know and conduct an extensive internet search. Through both, shortlist a few life settlements companies and go for the company that you think is the best.
While the two steps mentioned above are your responsibility, the company or the broker are supposed to take care of this step. The company or the broker would gather information pertaining to your life insurance policy and would also check your medical records. This alone do not to ensure you qualify for a life settlement from their side. These details also govern how much money your life insurance policy is worth. Make sure that the information that you provide to the broker or the life settlements company is secured through a privacy agreement since you don’t want your personal information to reach wrong hands.
Deciding the offer
Once the life settlement provider goes through the information that you give, including the medical documents and the details of your life insurance policy, he would decide if your policy qualifies for a life settlement. Next up, he would make the calculations as to how much cash your life insurance policy is worth. After all the calculations, he would bring an offer to your table.
The life settlement provider would mention the offer and explain to you about it. After the provider explains everything to you, it is now your turn to asses and evaluates if the offer is worth accepting or not. Here, you may negotiate with the provider. After all the negotiation, you are supposed to decide and report it to the provider.
Closing the package
Once you and the life settlement provider decide on the offer, the provider is supposed to bring a closing package to you. The closing package contains the documents related to the life settlement. It is also the responsibility of the life settlement provider to explain all the documents to you. Once he explains it all to you, you and your beneficiary are supposed to sign documents, accepting the offer officially. The provider takes the signed documents and proceeds with the other steps.
Transfer of ownership
After getting the signed documents from you, the life settlement provider sends these documents to your life insurance company, requesting transfer of ownership of the policy formally. The insurance company looks into the documents, signs them, and then hands over the signed documents to an escrow agent. The escrow agent is supposed to keep the documents safely till the process of transferring the ownership is completed.
Acknowledging the transfer of ownership
Once the transfer of ownership is recorded, you, the life settlement provider, and the escrow agent would receive confirmation from your insurance company regarding the same. Upon receiving confirmation, the escrow releases the funds in the form of payment.
Right from researching about life Settlements Company to striking a deal and finally getting cash in your hand, these are the steps that are involved. After all, getting a life settlement by selling your life insurance policy is not as complicated as it looks from the outside.