Understanding Your Life Insurance Options When You No Longer Need Life Insurance
When it comes to the idea of life insurance, there are more than enough reasons why anyone would want to purchase coverage and ensure the security of their financial situation in the worst case scenario. However, while many people will look to secure life insurance, another thing that needs to be considered is what will happen if it is no longer needed? Consider the following few options that are available in case you no longer want to keep your life insurance policy in force.
Selling Your Policy
Just because you don’t want your life insurance policy any longer doesn’t mean that someone else won’t want it. There are many investors who are interested in many different sorts of investments, including:
- stocks and bonds,
- real estate,
- private companies,
- or even purchasing life insurance contracts.
The benefit of selling a life insurance policy is that you will typically receive more than if you let it lapse or if you have surrendered the policy. However, you also need to carefully consider options to ensure you are comfortable with the process. So many people will get caught up in asking the question, “how should I go about selling my life insurance policy,” but they don’t consider the fact that once it is sold, it’s gone for good.
Letting Your Policy Cancel
While there can be different issues that occur depending on whether or not your policy is a term life or a whole life policy (as well as depending on how far you are into your actual policy term). The truth of the matter is when it comes to cancelling the policy you could wind up walking away with a significant amount of cash (if you are overinvested), you could come away with a preset term policy or life policy for a lesser amount of money than the original policy limit, or at the worst case you would walk away with nothing–but at least you don’t owe anyone anything.
If you think you don’t need the actual life insurance but you have a whole life policy for example, then you could still just keep paying the premiums and treat the entire policy like it is an investment account. The best case scenario is you can walk away with a much larger cash option that has been invested, while the worst case scenario is that you can still have something extra to give to your loved ones in case the unfortunate happens and you pass away sooner than expected.
The thing to remember with life insurance, in general, is that there truly are many different coverages and options. You will find that the more you see, the more you realize you might actually need some assistance when it comes to breaking down life insurance options. Make sure you understand exactly what you are getting as well as what you are potentially giving up with your life insurance.