According to a survey of more than 600 people conducted by Coventry Direct, 86.1 percent of life insurance policy owners do not know they have the choice to sell their unwanted policy instead of lapsing it for nothing or surrendering it for its cash value. Even a term policy with no cash value can be sold.
Consider this story: A car dealership owner originally purchased a $488,000 life insurance policy as a way to fund a buy/sell agreement with his business partner. After the business dissolved, his family continued to pay the premiums, but eventually decided they no longer needed the coverage. He was planning to surrender the policy back to the insurance company for $6,800.
He called them and was pleased to learn he had another option in which he was able to sell his policy for $80,000 -- more than 10 times what he would have received from the insurance company. The proceeds were divided among his three children, which they used to supplement their income.
"The vast majority of these seniors have no idea they may be able to sell that unneeded life insurance policy for several times more than its cash value."
Life insurance is personal property, has value and can be sold just like your home. The proceeds of the unwanted policy can be put toward paying health care bills, paying off debt or subsidizing other retirement expenses.
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