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Senior with an insurance policy that has served its purpose
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Ed’s Term Life Insurance policy length of coverage is about to expire

Ed’s term policy is set to expire and he no longer needs the policy. His unique situation is not very unusual. Many seniors like Ed, outlive their needs for life insurance. This happens when big expenses like a mortgage is paid off or when kids become adults and financially independent.

Ed is not aware, however, that his term policy may hold some value in the life settlement market, where it otherwise would have terminated without value.

The life settlement market will allow Ed to sell his unwanted or unneeded term life insurance policies  to a third party.

In a life settlement transaction, the policy’s owner transfers ownership of the policy to the buyer in exchange for an immediate cash payment and, in some instances, a reduced interest in the death benefit for the policy’s beneficiaries. The buyer assumes all future premium payments then receives the death benefit upon the passing of the insured.

Originally, Ed thought only permanent policies such as whole life or universal life insurance policies could be sold in this market, but he later learned that is not correct.  Often term policies have a conversation feature that allows the policy holder to convert the term insurance to permanent insurance, thus making it eligible for sale. 

The sale of the policy will help Ed with his medical bills and living expenses in retirement.

Because a life settlement transaction usually takes several months to complete and to avoid missing a life settlement opportunity, his review process should begin months in advance of the term policy’s expiration date.

Check out this video to learn more: 

Are there more attractive alternatives than to lapse or surrender of a term policy for Ed? Very likely. What steps should he take next?