For many seniors, medical bills are their largest expense in retirement. According to the Lifetime Medical Spending of Retirees report, seniors rack up an average of $122,000 in medical costs between the age of 70 and when they pass away. These costs include long hospital stays and medical goods and services not covered under Medicare, for example.
Balancing paying off this debt and living comfortably in retirement can be tricky. Do you have medical bills? Was there a sudden, unexpected health care cost that you had to pay out of pocket? We understand and we’re here to help.
Fortunately, many people are taking steps to get out of debt and pay for their medical bills. One strategy is to sell your life insurance policy for cash. The process, called a life settlement, can be relatively quick and easy and the rewards will be a debt-free retirement.
In this short guide, we’ll cover how to sell your life insurance policy to pay off medical debt.
- Consider a life settlement if you’re eligible
- Get an appraisal of your life insurance policy
- Pay down your medical debts
Step 1. Consider a Life Settlement If You’re Eligible
It’s time to think about selling your life insurance policy for cash. If this is a new concept for you, it makes sense. Most often when we think about taking money out of our policies, we think of withdrawals and loans. We might also think of surrendering the policy, another way to tap into cash in a policy.
However, these routes don’t compare to life settlements. For example, a cash withdrawal reduces the amount of your death benefit. With loans, you have to pay them back with interest. And surrendering a policy only gives you the surrender value in a cash payment.
With a life settlement, on the other hand, you usually receive a much larger amount of cash because the appraisal is based on the market value of your policy. Plus, you never have to pay back life settlements and you can use the money to pay off your medical bills.
Are you eligible? It’s easy to see if you qualify for a life settlement. Most qualified seniors are the age of 70 and older, have a life insurance plan of $100,000 or more, and have experienced a change in their health since they first purchased the plan. If you don’t find yourself in these scenarios, don’t worry – there are exceptions. You should still see if you qualify to sell your life insurance policy.
Step 2. Receive an Appraisal of Your Life Insurance Policy
Life settlement transactions are handled by licensed providers like Lighthouse. You’ll need to contact these third-parties in order to get an appraisal of your policy, which is the next step in paying off your debt.
Here are two things to keep in mind during the appraisal process:
An appraisal of your policy should be free, so remember you don’t have to pay for any quotes or the application process. For example, Lighthouse Life provides free appraisals.
It’s also important to note that you don’t have to sell your life insurance policy or go with the first quote that comes your way. The final call is yours and this should be a transaction that benefits you.
Step 3. Pay off Your Medical Bills
If you accept the offer generated by the appraisal, the next step is to complete the necessary forms to finish the transaction and receive your money. Life settlements are provided in a lump sum of cash, so you don’t have to worry about waiting for installments before you can pay down your debt. Additionally, there are no restrictions to what you may use this cash toward.
How long does it take to get your funds? With Lighthouse Life, you typically receive your money within 90 days days of the first contact, and sometimes even sooner.
With your money in your hands, you’re free to pay off your medical debt as you see fit. Whether you choose to pay off the entire debt or start paying installments, you’ll have the peace of mind that your medical bills are taken care of. You can even save the cash for future medical bills and expenses.
Paying off medical bills is important for a comfortable retirement. It can be difficult to pay things off when a big part of your money is stuck in a life insurance policy you no longer need. That’s why it’s important to consider a life settlement – it can provide you with cash and ultimately help you pay off your medical bills.
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