tag:blogger.com,1999:blog-2071392929803511449.post-21217691062800095192008-06-17T09:28:00.003-05:002008-06-17T10:18:18.650-05:00As fears about the economy worsen and financial liquidity is becoming harder to come by for some, I have started to hear this question more and more lately. In a recent article I addressed the question, <a href="http://gardenstatelifeinsurance.blogspot.com/2008/06/can-i-borrow-from-my-life-insurance.html">can I borrow against my life insurance policy?</a> In this post I'll look at some of the options in regards to whether a life insurance policy can be sold. <br /><br />There are companies that purchase life insurance policies. They are commonly referred to as life settlement companies. A life settlement company will usually pay the policyholder a flat amount for the insurance policy. In return the settlement company will begin making the premium payments and collect the death benefit when the insured dies. The amount the life settlement company is willing to pay is based on the size of the policy, your age, and your current health status. Since the life settlement company is making the premium payments, they actually profit more the earlier that you die. This means that the older or more unhealthy you are, the higher percentage of your policy's face amount you are likely to receive. <br /><br />The life settlement industry actually has its roots in viatical settlements. A viatical settlement was created for terminally ill people to be able to access their death benefits before they died in order to improve their care. Since their death had such a high probability of occurring and occurring soon, they could actually receive a very high percentage of their face amount. As the market for these types of settlements began to get more competitive, the industry started to look at policyholders who were not terminally ill but just older and no longer needing their insurance. This gave long time policyholders another option besides just lapsing the policy for the cash surrender value or maybe even nothing when the life insurance no longer met their needs. <br /><br />Therefore if you are relatively young and healthy and are 4 years into a 10 year term product, then you will probably not be able to sell your policy. If you are older than 50 and have a large <a href="http://gardenstatelifeinsurance.blogspot.com/2007/12/whole-life-insurance-explanation.html">permanent life insurance</a> policy, then there will probably be a pretty strong market for your policy. <br /><br />In my next post I'll try to address some of the issues and things to look for when selling your <a href="http://www.gardenstatelife.com/whyNeed.dhtml">life insurance policy</a>. <br /><br />Michael, <a href="http://www.gardenstatelife.com/">Garden State Life Insurance</a>Michael Musselmanhttp://www.blogger.com/profile/02819745657893406414noreply@blogger.com