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Life Settlement Eligibility Requirements
Who Qualifies To Sell A Life Insurance Policy?
Are you considering selling your life insurance policy? If so, you may be eligible for a life settlement. A life settlement is a financial transaction in which the owner of a life insurance policy sells the policy to a third party for a lump sum of cash.
There are two main eligibility requirements for a life settlement:
- The Life Insurance Policy;
- The Life Expectancy of the Insured
How To Qualify for a Life Settlement?
To qualify for a life settlement, you need to meet the following criteria:
- The life insurance policy must have a face value of $100,000 or more.
- The life insurance policy must be transferable.
- Most types of life insurance policies can qualify if the sale is allowed by the original contract of the insurance carrier. Please note that the contract language for group policies needs to be reviewed.
- Non-convertible term life insurance policies can be sold under limited circumstances; qualification will depend on the insured's life expectancy vs. the remaining premium schedule. If the premium schedule shows significant annual increases, the insured would likely need to be diagnosed with a terminal condition.
NOTE: A term life policy's conversion period is not the same as its fixed term period. Therefore, it is important to review your term life policy or contact the insurance carrier to confirm whether it is still within its conversion period. - Joint Survivorship or 2nd to Die policies can be sold, both insureds must qualify based on their health status, and offers are based on the healthier of the two insureds.
The life insurance policy contract must be available to review, if not available, a duplicate should be ordered from the life insurance carrier. The premiums and coverage will be verified directly with the life insurance company during the application process. Our life settlement team is knowledgeable on most life insurance contracts, so we can provide insight into the eligibility of most life insurance policies without a need to review the policy during the qualification phase.
Life Expectancy of the Insured
To qualify for a life settlement, the insured individual must release their historical medical records to Welcome Funds. Rest assured that all records are kept confidential and released only with the insured's authorization. Typically, the insured must have a limited life expectancy, usually under 15 years.
If the insured is under the age of 75 and considered very healthy or suffers from minor health conditions such as high blood pressure or hypertension, qualification for a life settlement would be unlikely.
Below are the general health parameters required to qualify for a life settlement, based on age groups:
- Under age 65: Life-threatening health conditions or a terminal diagnosis would be required.
- Age 65-74: Serious health impairments would be needed to qualify.
- Age 75-79: Chronic health conditions would likely be required for qualification.
- Age 80 or above: Qualification is likely, but it would depend on the future premium costs of the policy.
Benefits of Selling Your Life Insurance Policy
There are numerous advantages to selling your life insurance policy. Firstly, it allows you to receive a lump sum of cash that can be utilized to pay off debts, cover medical expenses, or invest in your retirement. Additionally, selling your life insurance policy can relieve you of the burden of monthly premiums, resulting in potential cost savings.
If you are contemplating selling your life insurance policy, we encourage you to reach out to Welcome Funds today. Our team can provide valuable insights into your options and assist you in determining if a life settlement is suitable for your needs.
How to Sell Your Life Insurance Policy
Selling a life insurance policy is an important financial decision and can be a valuable financial option for policyholders who no longer have a need for their life insurance policies. Take your life insurance policy to the secondary market with Welcome Funds. We negotiate directly with the top licensed buyers in the market through our auction-based platform, this creates competition for each policy resulting in multiple offers per policy. Let us help you get the highest offer for your life insurance policy! Here's what you need to do:
- Be prepared to answer questions about your life insurance policy, including the death benefit, annual premiums, and any loan values;
- Summarize the current and historical health of the insured;
- Complete our quick Life Settlement Qualifier;
- Call 877.227.4484 to speak to a Client Care Advocate for a free personal consultation.
Take the first step toward selling your life insurance policy by getting pre-qualified today!
LIFE SETTLEMENT BLOG
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