Going through an economic hardship can turn your life upside down. Whether it’s an unexpected medical expense, downturn in the market, or some other unforeseen complication, it’s difficult to be prepared for setbacks. If you’re going through a tough economic time and are looking for ways to supplement your income quickly, a life settlement might be the best way for you to access cash fast and give you peace of mind.
In this short guide, you will learn how cashing out your life insurance policy may be an option to help ease the financial impact of an economic hardship.
What Does it Mean to Cash Out a Life Insurance Policy?
A growing number of seniors no longer need or want their life insurance plans. There are many reasons why you might be in the same boat. Some examples include expensive premiums that no longer fit your budget, you don’t have children or they have grown, your health has changed, or you simply need the money now. If you find yourself in a similar scenario, it’s time to think about how to cash out your life insurance policy.
There are a few ways you can cash out a life insurance policy: taking a loan against your policy, surrendering the policy for cash value, and a life settlement. There are different use cases for each. However, if you no longer need the coverage provided by the insurance policy, or can no longer afford to maintain the policy, a life settlement may be your best option as the sale of a life insurance policy has potential to generate a significant windfall for you. Learn more about life settlements and how the transaction works.
Are You Eligible for a Life Settlement?
If you’ve decided that you would like to sell your policy, the next step is finding out if you qualify for a life settlement. If you are the insured and policyholder, your answers to the following may indicate if you are eligible for a life settlement:
- Are you 65 or older?
- Has your health changed since you purchased your policy?
- Is the face value of your policy $100,000 or more?
If you’ve answered yes to all three questions, you may qualify for a life settlement to help with financial difficulties. Find more details on life settlement eligibility in our FAQ page or for an estimated payout try our easy-to-use calculator.
The appraisal process is always free, and gives you the opportunity to learn more about how to cash out your life insurance policy. You can speak to one of our specialists who will find out more information about your policy, answer all of your questions, and provide you with next steps. If you qualify and choose to move forward, we’ll make an offer to purchase your policy.
If you accept our offer, we’ll provide you with the forms you need to complete the life settlement. After we receive and process the documents and the insurance company changes ownership of the policy, you get a lump sum of cash. This process usually takes 60 to 90 days from the time of initial contact.
Once you receive your lump sum, it is yours to use without guidelines or restrictions. This makes a life settlement especially attractive when things just aren’t lining up financially. Not only do you receive the payout quickly, but you can use those funds to pay bills, debts, or save for a rainy day.
Overcoming Economic Hardships with Life Settlements
Regardless of your economic hardship, a life settlement can be a vital part of your financial plan to overcome the challenges. Planning ahead can give you greater control of your finances and retirement. At Lighthouse Life, we want to make sure you have the support you need every step of the way. If you have any questions, simply give us a call.
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