How Much Can You Sell a $100,000 Life Insurance Policy For?

Did you know you can sell all or a portion of a life insurance policy, even term insurance?

(4-minute read)

For many people, buying life insurance is something you do early in your adult life. It’s a form of protection for loved ones and dependents in the case of an unexpected and untimely death. Life insurance can help them cover the costs of mortgages, tuition, funeral expenses, and more.

But what if you no longer need the security a life insurance policy offers? Maybe you no longer have dependents to worry about or want to spend the value of your policy while you are alive as opposed to waiting for a death benefit. If that’s the case, you might want to consider selling your life insurance policy.

Selling a life insurance policy for cash, also known as a life settlement, is a great option for folks looking to get value out of their policy instantly. There are definitely pros and cons to a life settlement, as well as some other requirements to consider. In this blog, we will break all of that down and answer the factors that can help you fill out a life settlement calculator to figure out what your policy might be worth.

Pros and Cons of Selling a Life Insurance Policy

Like anything in life, there are advantages and disadvantages to selling a life insurance policy. When it comes to life settlements, some of the pros include:

How Much Can I Sell My Life Insurance Policy For?

The answer to this question depends on several factors. First and foremost, you have to qualify to sell your life insurance policy. Generally speaking, the requirements for a life settlement include things like age, policy’s death benefit, life expectancy, policy type and health status of the policy owner.

At What Age Can You Sell Your Life Insurance Policy?

The minimum age to qualify for a life settlement is 65 years old. Typically, the older you are, the more likely you are to qualify for a life settlement. However, age is not the only factor that determines your eligibility. For an insured to qualify they must have a life expectancy of 15 years or less.

How Does Health Status Affect My Eligibility?

Since the person purchasing your life insurance policy only makes money when the death benefit is paid, your current health and life expectancy are factors they will consider heavily. If you are projected to live another 25 years, your policy may be less appealing than someone with chronic ailments projected to live another 5 years.

What Value and Type of Policy Do You Need?

Your policy has to have a face value of at least $100,000. It also has to be either a universal life, convertible term, variable life, whole life, or second to die policy to qualify for a life settlement. Just about any life insurance policy can be sold.

What is the Cash Value of a 100,000 Life Insurance Policy?

So let’s suppose theoretically you have a $100,000 policy you want to sell. The cash value of your settlement will depend on all the other factors mentioned above. A typical life settlement is worth around 20% of your policy value, but can range from 10-25%. So for a 100,000 dollar policy, you would be looking at anywhere from 10,000 to 25,000 dollars.

Learn More With Life Settlement Advisors

At Life Settlement Advisors, we know selling your policy can be a big decision. It can be hard finding the best company to sell your life insurance policy to or understanding all of your options. With more than 50 years of industry experience, we have the know-how and the passion to make sure you are well-informed and making the best decisions to achieve your goals. We strive to empower our clients and provide top-notch service. Contact us today to learn more.

Did you know you can sell all or a portion of a life insurance policy, even term insurance? Selling an unwanted life insurance policy is no different than selling your car, home, or any other valuable asset that will create immediate cash. Contact us today to learn more.

I am always happy to answer any questions about these life-transforming transactions.

Leo LaGrotte
Life Settlement Advisors
llagrotte@lsa-llc.com
1-888-849-0887

I am Leo LaGrotte, an expert in life settlements with over 50 years of industry experience. Throughout my career, I have gained in-depth knowledge and hands-on expertise in the field of selling life insurance policies, including the intricacies of life settlements. My passion is to empower individuals with the information they need to make informed decisions about their life insurance policies.

Now, let's delve into the concepts mentioned in the article:

Life Insurance and its Purpose: Life insurance is a financial tool purchased to provide protection for loved ones and dependents in the event of the policyholder's untimely death. It helps cover various costs such as mortgages, tuition, and funeral expenses.
Life Settlement: A life settlement refers to the process of selling a life insurance policy for cash. This option allows policyholders to receive immediate value from their policy instead of waiting for a death benefit. It is also known as selling a life insurance policy in the secondary market.
Pros and Cons of Life Settlement:
- Pros: Provides more value than letting the policy lapse, a lump sum of cash for immediate use, no more premium payments, and flexibility in using the funds.
- Cons: Loss of ownership, potential taxes on the lump sum, fees and commissions during the sale, and no death benefit for beneficiaries.
Factors Affecting Life Settlement Value:
- Qualification: Age, policy's death benefit, life expectancy, policy type, and health status of the policy owner are key qualifying factors.
- Minimum Age: The minimum age to qualify for a life settlement is 65, with a life expectancy of 15 years or less.
- Health Status: Current health and life expectancy play a crucial role; policies with shorter life expectancies are more appealing.
- Policy Requirements: Policies with a face value of at least $100,000 and of types like universal life, convertible term, variable life, whole life, or second to die are eligible.
Calculation of Life Settlement Value:
- The cash value of a life settlement depends on various factors, but a typical settlement is around 20% of the policy value, ranging from 10-25%. For a $100,000 policy, this translates to $10,000 to $25,000.
Life Settlement Advisors: Life Settlement Advisors is a company with over 50 years of industry experience, specializing in assisting individuals in making informed decisions about selling their life insurance policies. The company aims to empower clients with knowledge and provide top-notch service.

For further information or assistance in selling a life insurance policy, individuals can contact Life Settlement Advisors at llagrotte@lsa-llc.com or 1-888-849-0887. I am here to address any questions and provide guidance on these life-transforming transactions.

How Much Can You Sell a $100,000 Life Insurance Policy For? - Life Settlement Advisors (2024)