Is Your Life Insurance Policy an Untapped Gold Mine?
- Barry Boscoe
- 1 day ago
- 3 min read
Imagine discovering that an old piece of property you’ve been paying for, for decades, is actually worth hundreds of thousands of dollars more than the bank told you. For many seniors, that "property" is sitting right in a filing cabinet: it’s their life insurance policy. Most people believe their only options are to keep paying expensive premiums or surrender the policy for a small fraction of its value, but there is a hidden third path called a life settlement that can transform an unneeded policy into significant, immediate cash.
Understanding the Asset You Already Own
In the world of financial planning, we often talk about real estate, stocks, and bonds. However, life insurance is also a personal asset that can be appraised and sold just like a home or a piece of fine art. A life settlement is simply the sale of your existing policy to an institutional buyer.
The math is compelling: you receive a payment that is much larger than the cash surrender value offered by the insurance company, though less than the total death benefit. For many, it is a way to "recoup" the premiums paid over the years and eliminate the burden of future payments.Even if you do not have any cash value, maybe you have a term policy, it still may be worth something.
Why the "Old Plan" Might Not Fit Your New Life
Financial needs evolve over time. A policy that was essential thirty years ago might be a burden today. Clients and advisors often consider a settlement when:
The original need is gone: Adult children are now financially independent.
Premiums are too high: The cost to keep the policy is increasing due to age, cost of insurance, poor performance or health changes.
Life has changed: You’ve sold a business, retired, or experienced a change in marital status.
New goals have emerged: You need to fund long-term care, medical expenses, or want to see the impact of a charitable gift during your lifetime.
A Tale of Two Outcomes: The $235,000 Difference
To see how this works in the real world, consider a case study of an 82-year-old woman with a $1 million Universal Life policy.
The Insurance Company's Offer: If she had surrendered the policy for the cash surrender value back to the carrier, she would have received only $15,000.
The Life Settlement Result: By putting the policy up for auction, she received $250,000.
By forcing institutional buyers to compete, she secured 16 times the amount the insurance company originally offered.
Why You Need an Advocate in Your Corner
If you were selling your home, you wouldn't let the buyer's agent set the price. The same logic applies here. Many advertisements for life settlements come from "providers" who represent the buyer's best interests not the sellers.
To get the true market value, it is essential to work with a licensed life settlement broker who acts as your representative. They manage a secure policy auction to ensure multiple buyers are bidding against each other, which is the only way to maximize the value of the asset.
The Path Forward
The process is straightforward and starts with a simple appraisal:
Screening: Gathering basic policy and health information to determine a value range—notably, no medical exam is required.
Negotiation: Your representative creates competition in the market to drive up offers.
Closing: You are guided through the paperwork to transfer ownership and receive your funds.
Life insurance should be a tool that serves your current financial reality, not a bill that holds you back.
If you would like to explore your options regarding your life insurance please contact me:
Office: 818-342-9950
Mobile: 818-802-0686
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