How does selling a life insurance policy works? Selling a life policy is also known as a life annuity, sometimes called a finical annuity. When you pass away, you sell the life policy to a third party, either a financial institution or insurance company. They then receive the death benefits and pay your existing premiums.
In order to sell a life policy, you must surrender value. Surrender value is the amount that the insurance company would receive if they were to pay out the entire death benefits on your death Retirement planning. Most life insurance policies are purchased in five-year increments. Once the fifth year has passed, the premiums will cease at this point and the remaining premiums will be due at the time of the surrender value.
The surrender value is not always calculated in the premium payment because it can vary depending on the age at the time of purchase of the policy, the health of the applicant, and the amount of accumulated cash surrender value.
As you can see selling a life insurance policy is not a difficult process, but it does require some legwork. When you are considering selling your life insurance policies, it is important to know how much cash surrender value you have and what kind of premiums you currently pay.
By obtaining and comparing quotes from different companies, you can choose the best option for both the price you pay and the amount you get for your surrender value.