A life settlement and viatical settlement is the legal transaction when the insured individual chooses to sell their life insurance policy to a licensed third-party known as a settlement buyer. The buyer then assumes responsibility of paying the premiums associated with the life policy in exchange for a one-time, lump-sum cash payout. After you pass away, the buyer then collects the death benefit. The process takes approximately 6-8 weeks.
Life and viatical settlements are for those that have unwanted or no longer needed life insurance policies. A settlement transaction allows you to receive a cash payout now by selling your life insurance policy.
Am I Eligible to Sell My Life Insurance Policy?
You may be eligible to sell your life insurance policy if:
- You are at least 65 years old
- The policy has been in force for at least two years
- The face value of the policy is more than $250,000
- You have a permanent life insurance policy, such as whole life, universal or convertible term
Your eligibility is also based on your health and life expectancy. For those terminally ill or chronically ill, you may qualify for a viatical settlement. You are deemed terminally ill when your life expectancy is expected to be less than 2 years.
How Much Could My Life Insurance Policy Worth?
- The average payout is approximately 20% of the face value, also known as the death benefit. For example, if you have a life insurance policy with a cash value of $400,000, you can expect to sell your policy for approximately $80,000 in cash.
- Higher cash-value policies yield higher settlement amounts; however, you may have to pay taxes on a life settlement, and this varies by state.
- Viatical settlement payouts are much higher due to the limited life expectancy of the policyholder and the buyer will collect on the death benefit much sooner compared to a life settlement. Also, viatical settlements are usually tax free.
To find out an estimate value of your policy in minutes, use our online settlement calculator.
How to Find a Buyer for My Life Insurance Policy?
There are several options to find a buyer for your life insurance policy, including:
- Cold outreach, you can try and contact buyers directly
- Asking others who have sold their life policy for a referral
- Search online
- Selling your policy through a professional firm like MRE Finance, who are experts in the settlements industry
Trying to sell your life insurance policy on your own is risky and unadvisable. The process takes much longer to receive funds. Those who try to sell their life insurance policies by themselves, by undertaking cold outreach, or looking for buyers online typically run into problems. There are a multitude of online “buyers” who look to take advantage of the elderly by offering to buy their policies without ever paying in return.
Working with MRE Finance to find a buyer is your best option. MRE Finance are experts in the life and viatical settlements industry, with over 25 years of experience in helping seniors sell their life insurance policies to qualified buyers for cash.
Do You Have to Provide Proof of Identity and Ownership of Your Life Policy?
- You will be required to provide proof of your identity and ownership of the life policy.
- You will need to provide the life insurance policy documents. MRE Finance will work with the insurance carrier on your behalf, (with your permission) to gather all the documents needed if you don’t have all paperwork needed for the transaction.
Life Settlement or a Viatical Settlement? Which One Is Right for Me?
The two most popular ways to sell your life insurance policy are:
Life settlement: You sell your life insurance policy to a licensed third-party buyer for a lump sum cash payout. A life settlement is typically for those over 65 years of age, the face value amount of the policy is over $250,000.
Viatical settlement: You sell your life insurance policy when you have a severely shortened life expectancy. You are deemed either terminally ill or chronically ill. You will provide medical records from your licensed physician that verifies your health status. Viatical settlements result in higher payouts.
Want Help Selling Your Life Insurance Policy? Call MRE Finance!
If you want to sell your life insurance policy for a lump-sum cash payout, MRE Finance can help! We have a dedicated team of settlement experts that find a licensed buyer for your life policy.
We will review your policy, provide you with a FREE estimate of what your life insurance policy is worth, and guide you through the entire process with ease.
You can find out the estimate value of your life policy within minutes, by using our FREE settlement calculator now. Click the button below to get started. Got questions? Call MRE Finance at 1-800-521-0770.
