Life Cash Value Is Critical

Life insurance is never bought for your own benefit. You want to help the people around you with some financial support when you leave the world. All the money that is to be received after your death when you are insured is given to your nearest family members. Of course, it already needs a big heart from a person to think about others and take the pain to help them live a better life when he/she has already passed away. However, there are times when the insured person is not in the position of carrying on with his/her life insurance policy.

The Reasons That Make Life Insurance Policy Unneeded or Unaffordable
There are literally infinite reasons why a person would want to cancel his/her life insurance policy.The most common reason is that people are not in a position to afford the insurance policy. It is not that the life insurance policy is not affordable per se, but these people make the mistake of choosing a life insurance policy that does not fit in their budget in the first place.

They do not look into their options of making the policy affordable for them and the premiums they have to pay every month, quarterly or at another schedule become unaffordable for them. By going for a smaller cover they have the option to reduce the costs of their premiums. Many other perks and bonuses from the policy can be taken away from the policy to make it affordable. Of course, there is always an option for interested people to go for term life insurance where the person is covered to get benefits only for a certain time period.

The Disadvantages of Canceling the Insurance Policy
There are pros and cons of every method that can be used for canceling the policy. In most cases, it is the insured person who has to be on the losing side when a policy is canceled. It is because the insured person is actually breaking or canceling a contract he/she had promised of keeping intact. Letting a policy lapse is statistically the most common method used by people to move out of an insurance policy but it is also one of the most harmful methods of doing so for many different reasons.

First, when you let your insurance policy lapse, you are actually slowly killing the insurance coverage. Not only do you lose the many benefits of the coverage but you also end up with no refund at all. If there is any cash value of your policy, it is used by the company towards the payment of your premiums until the full money in your account has expired. There is still a timeframe available for the insured person to bring this policy to life but that would require the premiums to be revised. The costs will go higher and the policy will become even more expensive.

Sell Your Life Insurance Policy and Get Cash
The heading says it all; you can sell your life insurance policy and get cash, and it is one of the best ways out there for anyone to end a policy. This particular method is designed for senior citizens who are not in the position to carry on with the policy anymore. Either their circumstances have changed for continuing with the policy or they can't afford to pay for the policy anymore. Canceling the policy using the methods stated above can be extremely disappointing for them. However, one would take such a decision when he/she is ill-informed about the best ways to end a policy. It is quite unfortunate that very few people are aware of the life settlement method of ending a policy.

In this particular method the person with the insurance can sell the insurance policy to another individual against cash. This is also called life insurance settlement. It is quite surprising that individuals don't have much information about this method of making money from their policy. The math on this is quite simple. You can have a look at other methods and decide easily that those methods are not better than cashing your life insurance policy. When you let the policy lapse you get paid absolutely nothing so any other method that pays even a penny to you would be better than this method.

How Life Settlement Works
Of course, people should be left on their own to make their decision after expert advice has been conveyed to them. However, it makes more sense to know this little known method and its benefits before someone decides to end the policy haphazardly and with a loss. According to the reliable statistics people over the age of 65 can benefit the most with this method.


A third party gets to buy your remaining insurance policy and you get cash in return. According to the experts of the field and reports issued in 2009, a person who opts for life settlement over any other method of ending the life insurance policy will receive nearly 8 times more money than if he/she had chosen to surrender the policy with surrender charges. The good thing here is that there is nothing to put as collateral. You could think of your insurance policy as your asset that you sold in the time of need to obtain cash - an old and conventional transaction by nature.