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Life Settlements for Term and Group Life Insurance

Have you ever heard of someone throwing out old junk from their attic—like a comic book or a lunch box—only to discover that it was worth thousands of dollars to collectors? It’s an agonizing scenario, and the fear of throwing out something valuable has led many rational people to hold onto an array of useless items. But while too many of us are hoarding corroded Dionne quintuplet spoons, thousands of Americans each year are throwing out something that really is worth money: term and group life insurance policies that can be turned into cash through a life settlement.

Many people think of term life insurance as a purely disposable product. They buy term life insurance for the period when they need life insurance protection. Once that period is over, they discard the life insurance to avoid paying premiums for insurance protection they no longer need. Term life insurance has no cash value, so they typically receive nothing from the insurance company when they cancel their policy.

If you are age 65 or over, however, you may have an opportunity to extract some final value from term life insurance that has served its purpose. Many term life policies are “convertible” into permanent policies, such as whole life or universal life. If you have the right to convert your policy, it may be worth thousands or tens of thousands of dollars—even if you intended to let the policy lapse or expire.

Here is how it works: In exchange for a lump-sum cash payment, you transfer ownership of your policy to a third-party investor. As the new owner, the investor pays all future premiums and receives the policy’s benefit when the insured passes away. This transaction is called a “life settlement.” The end result is that you have relieved yourself of paying premiums on an unwanted policy, and you have received a cash payment for something you intended to throw away.

Group life insurance, the kind of coverage your employer often buys for you, can be used in a life settlement in a similar fashion. Many group life insurance policies give you the right to obtain an individual permanent life policy. If you have such a right, you can obtain an individual policy and sell it through a life settlement for a cash payment.

So what is the catch to entering a life settlement on your term or group life insurance? There really is none, although they are a few considerations to keep in mind. First, you should not purchase or hold onto a policy you don’t need in the hope of obtaining a life settlement later. No matter what someone may promise you, there is no guarantee that a policy which is not eligible for a life settlement now will be eligible in the future. Second, most insurers will only insure your life up to a certain maximum dollar amount. Insurance that is still in force because of a life settlement counts against this limit, even if you no longer own the policy. This will only matter if you attempt to obtain additional insurance later that exceeds this limit.

Life settlements of term and group life insurance may offer an incredible opportunity for you to profit from an asset you didn’t know you had. Conversely, discarding a life policy without considering a life settlement could be like tossing the first copy of Superman into the trash. Don’t risk throwing away thousands dollars, tens of thousands dollars, or even more. If you are age 65 or over, always check with a life settlement broker before you surrender a term life policy that you no longer want. You should also always consult a life settlement broker before you end employment with a company that provides you with group life coverage.

Open Life Settlements is happy to help you find out whether your term or group life insurance is valuable. We are a boutique life settlement broker that provides exceptional customer service. Best of all, there is no risk to seek offers. Since we work on a commission paid by the purchaser, the application process is completely free to you, and you are under no obligation to accept any offer we obtain. Call 866.877.4054 today to discuss your options with one of our friendly, knowledgeable brokers. Let Open Life Settlements help you find money you didn’t know you had.