Term Life Insurance Conversion Option and Life Settlements

Many senior clients over 65 years of age aren’t aware that a term life insurance policy (if convertible) can be sold on the secondary market for a significant cash payment. Using this strategy can be an effective method for qualifying seniors that don’t need the coverage but are looking at ways to optimize the monetary value of the policy.

Finance professionals need to discuss these options with each senior client if their term life insurance is getting close to expiration. Not making them aware of their life insurance settlement options will often result in an expired policy, which causes a missed financial opportunity.

Factors That Create Value in a Term Life Policy

The value of a term life policy is based on a variety of factors. The seller will receive a cash payment that’s more than the policy’s cash surrender value, but it’s less than the death benefit. A life settlement company will present your policy to several prospective buyers to help you maximize your return.

Here is an overview of a few examples of why a term life insurance conversion option may make sense for your situation.

Recently Retired

A retiree may want to optimize their cash assets to gain additional funds for traveling and improving their quality of life. An insurance agent can conduct an in-depth review of their term life insurance policy to determine the best option. Converting and selling term life insurance can result in a substantial financial windfall to help someone fully enjoy retirement.

Serious Illness

Someone may need cash after being diagnosed with a serious illness that will shorten their life expectancy. An insurance agency can generate additional money by selling an unwanted term life insurance policy. Negotiating a term policy conversion can result in gaining much-needed cash to cover medical bills and other expenses.

Policy Nearing Expiration

Understanding your life insurance settlement options is essential before your term policy expires. Exploring all of the available options with life settlement companies is important in helping you make the best decision for your situation. Many times an insurance representative can negotiate a cash settlement to help supplement retirement.

Facing Financial Challenges

Dealing with various financial challenges is a reality for many people. Adding health issues and medical expenses on top of these challenges can make it even more difficult to manage finances. However, an insurance agent can help with term life insurance conversion to prevent a policy from expiring while generating additional funds.

Key Man Term Policy

A key man term policy is a type of business insurance covering specific employees in the event of a death. Converting a key man term policy to a universal life policy is often beneficial before it reaches its expiration. Eventually, the universal life insurance policy can be sold for a significant sum of money once the business owner retires.

Closing Thoughts

Living to nearly 100 years of age is a new reality for many seniors. However, the fear of outliving their savings is an unfortunate reality for some people. Understanding the term insurance conversion option is critical if your policy is reaching its expiration. The proceeds from life settlement companies can offer unexpected cash while also providing much-needed peace of mind.

Insurance agents and finance professionals need to further increase awareness of life settlement options by highlighting how they can benefit seniors needing additional cash. Discussing the different options available as a policy nears expiration is essential in determining the best interests of the policy owner. Learning more about what happens when term life insurance expires is always necessary for avoiding mistakes. Ultimately, an experienced life settlement broker can play a crucial role in helping you determine the best life insurance settlement options for your situation.

Recent Posts