7 things You Need to Know About Selling a Term Life Insurance Policy – Lighthouse Life

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1. what is a term life insurance policy?

A term life insurance policy is a type of life insurance that provides a death benefit to the policyholder if the insured dies within a specified period of time. This differs from a permanent life insurance policy, which will remain in force until the death of the insured or until the expiration date of the policy.

Term life insurance is often called “term insurance” because it fills a temporary need. Term life insurance is often a way for the primary breadwinner in a household to ensure that if they die before retirement, a mortgage can be paid or their children’s education will be financed. many people keep term policies for other reasons as well, even long after they retire.

Reading: How can i sell my term life insurance policy

Many young individuals and families purchase term life insurance initially because the premiums are substantially lower than a whole life insurance policy with the same death benefit amount. Although whole life insurance builds cash value over the years that can be withdrawn or borrowed, many people choose to purchase a term life insurance policy with a higher death benefit to provide maximum financial security for their life. his family.

The most notable drawback of term life policies is that if the policy expires while the insured is still alive, the policy does not pay any death benefits. the policy expires worthless, and non-refundable premiums paid never result in a death benefit being paid to policy beneficiaries.

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However, there are ways a policyholder can get value out of a term life policy they no longer want to keep. In many cases, he can sell a term life policy through a life settlement. But unlike shopping for a life settlement for a whole life or universal life policy, there are a few steps you need to take before selling a term life insurance policy.

2. determine if your term life insurance policy is convertible

When signing up for term life insurance, you may have been asked if you wanted to add a conversion rider. This rider allows you to convert a term life policy to a whole life policy. Generally, you must exercise your conversion privilege before the policy expires and before you turn 65 or 70.

If you added a conversion rider, it will be specified in your policy with full details on how and when you can convert from term insurance to permanent insurance. If you’re not sure after reading your policy, a life settlement provider can review it with you and help you determine if it’s convertible.

These riders may cost extra, but in exchange for the increased cost, you get the ability to claim some of the value through a settlement or by keeping the policy for the rest of your life.

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If you don’t have a conversion rider as part of your term life policy, you probably won’t be able to sell it through a life settlement. The exception to this rule is if you have a term policy and you have an extremely serious or terminal health condition. in that case, you may still be able to sell your term life insurance policy and should contact a life settlement provider to discuss your options.

3. if you have a conversion clause, read it carefully

Most conversion clauses have expiration dates. If your term life insurance policy is coming to an end, you should take some time to review the rider and make sure it’s still valid.

If the rider has not expired, you have the option to convert the policy from a term policy to a permanent policy, either whole life or universal life. converting a policy is an important decision. Be sure to carefully review and understand your conversion rider before converting the policy if that is your decision.

If you have questions about the convertibility status of your policy, a specialist at a life settlement provider can explain the details of the policy (provided they have the policy available) or you can even contact your insurance company at line to make sure you get all the answers you need.

Source: https://amajon.asia
Category: Other

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