Most of us have a life insurance policy, itās something we should all have to make sure our loved ones are looked after when we have gone, right? What if it isnāt necessary anymore though? What if you have enough in savings for your partner to be able to get by and what if the kids are all grown up and settled and really donāt need the cash boost? Maybe you could use some of that money that you have been paying into your life insurance fund to treat yourself a bit? Selling your life insurance policy can help make things youāve always wanted to do possible but there are things you need to think about first. Here is our list of concerns to help you out.
Make sure the people you are dealing with are licensed
When dealing with anything of a financial nature, you should always ensure that the people you are dealing with are licensed. We wish we didnāt have to say it, but there are always those out there looking to make money off of your misfortune, donāt fall prey to their scams. Understanding the different licenses that financial advisors need can help ensure you work with a reputable agent.
Shop around to get the most value for your policy
Itās the same with every purchase we make in life, we should always shop around to make sure we get the most value for our policy. Remember, this is a once in a lifetime opportunity. You have been paying into this policy for a long time and you deserve to unlock a lot of the value from what is in that pot. Make sure you donāt settle for anything less than an amount that will help you fulfill your dreams. When shopping around, Mason Finance is a good place to start, they offer extremely fair valuations.
Selling your policy may affect your ability to qualify for government programs
Itās worth understanding before you sell your policy that a big lump-sum payment may affect your entitlement to government programs. Make sure you also think about any impact it might have on college grants for any children that you have that would look to be applying in the future. Make sure you do your research before you sell and also read our post on why we need free education for all. Weāre probably preaching to the converted but we do need to get the idea out there.
Look into the tax implications of the sale
Before you sell, you need to make sure that you are happy with the value that you will receive. This includes deducting any tax that might be due on your lump sum payment. There would be nothing worse than neglecting to consider tax and then realizing that your lump sum isnāt as life-changing as you thought once the tax man comes knocking. Get some advice before you allow the sale to go through.
Selling your life insurance policy may incur fees
You should also remember to take into account any fees that might be due once the sale goes through. The agency that you use to make the sale should always be upfront about what these will be. If they do not provide the information in a concise way, it could be time to look elsewhere.