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Cash for Your Life Insurance Policy: Why 297,000 Seniors Leave Money on the Table Every Year
By Saul L. Appel, CLU®, ChFC® | Published January 22, 2021
Every year, hundreds of thousands of seniors surrender or drop life insurance policies worth far more than they realize. If you own a life insurance policy you no longer need, a life settlement could put real cash in your hands — often four times more than the insurance company would give you.
The Staggering Numbers Most People Don't Know
Here's a fact that should stop every policyholder in their tracks: over 500,000 life insurance policies are surrendered or dropped by seniors age 65 and older every single year. Of those, it's estimated that at least 300,000 would have qualified for a life settlement.
And yet — fewer than 3,000 of those policies were actually sold as life settlements in 2018. That means 297,000 policyholders walked away with far less than their policies were actually worth.
That's not a rounding error. That's billions of dollars in value left on the table by people who simply didn't know they had a better option.
What Exactly Is a Life Settlement?
A life settlement is the sale of an unwanted or unaffordable life insurance policy to a licensed institutional buyer for a lump-sum cash payment. The key difference between a life settlement and surrendering your policy to the insurance company is the amount of money you receive.
When you surrender a policy, the insurance company pays you the cash surrender value — which is typically a fraction of the policy's actual market value. When you sell your policy through a life settlement, institutional buyers compete for your policy, driving the price up. The result is a cash offer that is typically at least four times higher than the surrender value.
How the Cash From a Life Settlement Can Help You
The proceeds from a life settlement are yours to use however you choose. Clients commonly use the funds for:
- Retirement income to supplement Social Security and other sources
- Medical expenses including long-term care costs
- Paying off debt such as mortgages or credit cards
- Travel and quality of life — enjoying the retirement you've earned
- Gifting to family or funding a grandchild's education
The cash from a life settlement is tax-favored, meaning you may pay significantly less in taxes compared to other income sources.
Who Qualifies to Sell a Life Insurance Policy?
You may qualify for a life settlement if you meet these general criteria:
- Age 65 or older (or younger with significant health conditions)
- Policy face amount of $100,000 or more
- Policy type: whole life, universal life, variable universal life, or convertible term
- The policy is currently in force with premiums paid up to date
Why Work With an Independent Life Settlement Broker?
Not all life settlement providers are the same. Some represent a single buyer, which means you get one offer — take it or leave it. As an independent life settlement broker, Appel Financial represents most major institutional buyers in the market. We submit your case to multiple competing buyers to ensure you receive the highest possible offer.
We work for you — not the insurance company and not the buyer. Our job is to make sure you understand all your options and get every dollar your policy is worth. Learn more about how we help seniors get the most from their life insurance policies.
Don't Make the Same Mistake 297,000 Others Made
If you have a life insurance policy you no longer need or can no longer afford, find out what it's actually worth before you give it up. A free, no-obligation evaluation takes just minutes and could be worth tens of thousands of dollars.
Ready to find out what your life insurance policy is worth? Get your free, no-obligation estimate in 60 seconds.
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Saul L. Appel, CLU®, ChFC® is the President of Appel Financial, Inc. — an independent life settlement broker representing most major buyers of senior life insurance policies. With over 50 years in the industry, Saul works with individuals, families, brokers, and agencies nationwide. 📞 617-610-1898 | appelfinancial@gmail.com | www.appellifesettlements.com