Do you have a life insurance policy you no longer need? Perhaps your kids are finished with school and living independently. You might not want to keep paying steep premiums every year.
One possibility is to surrender your policy. If it has cash value, you may wind up with some money.
Another option is to sell your policy. This type of transaction is called a life settlement. Institutional investors buy pools of such policies and keep paying the premiums while awaiting a payoff.
In some situations, you might get more from a sale than from a policy surrender:
* You must have a severe health condition. Investors often buy from elderly individuals so a sale might work for your parents.
* You must have the right kind of insurance policy. Buyers prefer universal life policies because they permit reductions in premium payments. Term life policies that can be converted to universal life also may be sought by buyers.
If you’re interested, contact your life insurance agent, who probably can get in touch with buyers. Ask to see bids from at least two life settlement brokers so you can be confident of getting competitive bids.
