Settlement
companies must be licensedCompanies that purchase life insurance policies are known as life insurance settlement companies. These companies must be licensed by the Texas Department of Insurance. Beware of scams as you would any financial transaction. Call 800-252-3439 to verify a company's license.
Price is based on age, health and policy value
Life insurance settlement companies are primarily interested in purchasing high value, senior policies. You will probably need to have a policy of at least $100,000 and be over 65 to sell it. These settlement companies will pay more if you have a health condition that reduces your years of life.
No premiums or death benefits
The settlement company will assume your policy and pay the premiums. You will not have to make any more payments, but your family will not receive life insurance benefits.
Offers may vary
Check offers from different settlement companies before making the decision to make the sale.
- You may have to pay taxes on the money you receive from the sale.
- The money from the sale could disqualify you from receiving Medicaid and some other public assistance.
- The money may not be exempt from creditors.
Other ways to get cash from a life insurance policy
- If your policy has built up cash value, you can withdraw the money or take out a loan against the policy.
- If you have current cash surrender value, you will be able to stop the policy and get the accumulated cash. However, there could be charges for withdrawing this surrender value early.
- A policy with an accelerated death benefit will prepay some or all of the death benefit before you die. You must still meet the policy requirements, such as having a terminal illness, a specific illness, or a long-term illness
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