How Do You Decide If You Really Want To Sell Your Life Insurance?

The first thing to do is to refresh your memory on "why" you bought the life insurance in the first place. If you bought it because of young, dependent children or a dependent spouse, has anything changed?

If not, then you should probably keep the coverage.

If your children are now on their own and your spouse is gainfully employed in a secure job, then why not consider the sale, especially if you have substantial other assets.

Many clients sell to raise their liquidity in the shaky economic situation in the country or to have money available to buy long term care insurance.

Recently, I had a client ask what he should do in view of the financial meltdown. This client has a couple of teenage sons and a young daughter. He planned to use the sale of his policy to pay off debts, have additional liquidity and open an additional business. While all of these goals were worthwhile uses for the money, I advised him to keep his policy until his children were older, until his wife attains tenure in her teaching job, and until the economy shows what direction it is headed.

Since this client's policy is term insurance, he has two years before the term conversion period expires at age 80. If he does not convert it, he cannot sell to an investor but he could keep it until age 85. If he is still alive at age 85, the insurance company keeps all his premiums, he gets nothing, and the insurance company has a party!

Needless to say, even the old, conservative life insurance companies don't like the idea of selling to investors.

Why? Because many people don't keep their policy until they die--they either surrender them, they get old and forgetful, let them lapse with no value or forget to pay and the policy goes on extended term insurance and expires with no value.

Many times an insured will die during the extended term period but nobody files a claim and the insurance company is off the hook.

A good agent would read the policy and help the family file a claim if they know about the policy.

When policies get old or insureds get old, the insurance companies lose track of the insured. If there is any remaining benefit the insurance company sends the money to the state.

Each state has billions in insurance benefits sitting in the state treasurers office. The insured has died, the children and other relatives have moved away or died also and nobody gets any benefit.

What a waste!

While you still have control of your faculties and know what you are doing, let us work with you to help you decide if you still need the insurance.

If you don't still need it, we can get you 3-4 times what the insurance company will give you--sometimes more!

It's true the financial institution will keep paying the policy until you die and they get their profit.

In the meantime you can enjoy what you get NOW.