Cash For Your Life Insurance Policy If Not A Senior

The Great Recession has caused more than a few people to look for sources of cash. A common question I get is can you get cash for your life insurance policy if you are not a senior?

Let’s start with the basic premise of cash for life insurance policies. A life insurance policy is essentially a contract. You pay a certain amount of premium to a life insurance company that promises to pay a death benefit should you pass during the dictated time period. While you and the insurance company view it as a contractual agreement, there are certain groups that view it as a potential investment opportunity. 

The concept is known as a life settlement. In general, an investment group will purchase your life insurance policy from you. They take over the payment, but also receive the death benefit when you pass on. You, of course, receive a lump sum cash payment. Why would an investment group do this? They believe you will pass away soon enough that they will end up making more money then they spend – a positive investment. 

Life settlements usually are done with seniors for the rather obvious reason that they are more likely to pass away in a relatively short time than someone who is 30 years old and in good health. Can you get cash for a life insurance policy if you are not a senior? It is difficult, but there are two generally accepted strategies.

The first strategy is fairly simple. If the life insurance policy has any cash value, you can simply borrow against said value in an amount allowed by the policy. You then repay the loan over time or not at all and have the death benefit reduced by the amount of the loan. 

The second strategy involves the circumstances of your health. If you have a terminal disease or are in very bad health, investors will pay cash for a policy. This is generally known as a “viatical settlement”. The good news is you get cash out of the policy, but the bad news is rather obvious – your deteriorating health. 

Every situation is different, so please consider the above only as a general guideline. To learn more about the options available for your specific situation, contact us today for a no cost consultation at (800) 341-5433.