There are numerous solutions available if a policyowner is unable to continue paying the premiums of their life insurance coverage.
Cash Payout
It may be possible to cash in the policy. The policy might be redeemed. This could be a smart move for older policyholders who require funds to cover their living costs, including home case, if the policy's cash value is good enough. Cashing it in is not recommended if the insurance firm's cash payout is inadequate.
Let the Insurance Terminate
Another possibility is to cease paying premiums and allow the coverage to lapse. Given that the insured may lose both the premiums invested into it and the policy, this is the most undesirable option.
Have the Recipient Pay the Premiums
The insured and beneficiary may arrange a payment plan for premiums. It is an excellent choice if the beneficiaries are interested in maintaining the coverage so they can get the death benefit down the road and can afford to pay the premiums. The insured's children can also pay for the insured's premiums if the insured designates them as the irrevocable beneficiaries of the policy in return.
Selling Your Life Insurance Policy
The insured may sell their insurance to a buyer on the free market if they are unable to continue paying the premiums. A life settlement is the process of selling an insurance plan in this manner. Life insurance policies are a high-value asset that you can sell to investors who are looking for existing insurance plants. Generally, the investors tend to be insurers themselves.
According to actuarial tables utilized by insurers, the value of a life insurance plan depends on the life expectancy of the insured.
The shorter the life expectancy of the insured and the older they are, the higher the investors are willing to pay for the insurance. This sum might be up to three times more than what your insurance firm might offer as a cash payout.
Life settlements means the individual who purchases the policy becomes the owner of the contract and is in charge of paying the premiums. In return, the original holder of the life insurance gets a payout that they may use to pay for medical treatment, home case, living expenses, and more.
You have a few alternatives if your life insurance plan is proving to be too costly for you to keep. The particulars of your particular plan and its cost value can help you determine which would be the most practical option for you.
Our life insurance attorneys handle delayed and denied life insurance claims as well as beneficiary disputes.