How To Get Funds From Your Life Insurance Policy

Getting a life insurance policy—an essential part of estate planning—is advisable both for people in good health and those with a chronic illness. Investing in life insurance is especially crucial for people with dependents, as it can provide them with peace of mind that their family members will have financial support when they die or can’t provide for them. Upon obtaining a life insurance policy, the policy owner chooses beneficiaries who can claim an inheritance from the policy. Typical candidates for beneficiaries include a spouse or children.

In situations where the insured person’s death happens before the end of the policy term, the insurers provide the beneficiaries with a payout of the insurance policy proceeds—a payout referred to as the death benefit. The death benefit is typically lower in amount than the cash value of the policy.

The payout can help ease the financial strain of illness, injury, and death for the policyholder’s living dependents. To ensure their named beneficiaries can receive the death benefit, policyholders must keep their policies active and pay the required premiums.

Insured people must pay premiums on their life insurance policies throughout the policy’s term life. The amount of coverage a person needs can impact the cost of their premium payments. For this reason, it’s best if people buy insurance policies they can afford.

How can policy seekers determine what insurance plan is right for them?

A person’s health status, family size, and savings and expenses can determine the type of insurance plan they can get. People seeking affordable life insurance can keep these factors in mind as they research insurance providers and their available policies.

Using reputable web resources, people can search online for tools that help them estimate the average costs of life insurance, the best insurance providers available, and what conditions they should meet to be eligible for the insurance policies insurers offer. Speaking with professional insurance agents from insurance companies and obtaining life insurance quotes can help policy seekers weigh their options and make the best decisions for their families.

Obtaining Funds from Your Life Insurance Policy

Considering that life insurance can assist insured people and their families with paying for college tuition, home mortgages, and final expenses, there may be instances where insurance policyholders need to get funds from their life insurance policy.

To obtain funds from a life insurance policy, insured people could cash in on their policies or sell them. Some people decide to cash in on one insurance policy if they have another one, their policy is no longer necessary, or they can’t afford to keep paying on their existing policy. If selling a life insurance policy seems ideal, research the process or consult insurance professionals about it to learn if your policy is eligible for selling and find out who can purchase it. In most cases, insured people can sell their policies to related and unrelated parties, such as a relative or a life settlement company that buys policies.

In some cases, people with life insurance policies can sell their policies to a viatical settlement company or viatical settlement broker. Reputable and top-rated viatical settlement companies offer viatical settlements to terminally ill people and purchase their life insurance policies, providing these individuals with a lump sum payout that enables them to take care of end of life expenses they may have.

Viatical settlements are specifically available to policyholders with terminal illnesses, so viatical settlement providers only agree to viatical settlement contracts with insured people with chronic or terminal conditions and a two-year life expectancy. Policyholders in good health, however, are eligible for life settlements. If you qualify for such settlements, consider them as options for gaining access to funds that can come in handy.

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