While there are not many cons to a life settlement, one that is top of mind for many individuals is the question of taxes. Whether you surrender or sell the policy, you will have to pay taxes on any amount you earn that exceeds the premiums you have paid. For instance, if you have paid $25,000 in premiums over the lifetime of the policy, and get $30,000 in a life settlement, you would have to pay taxes on $5,000.

While the greater returns that are earned through a life settlement may have you concerned about tax liability, remember that working with a financial advisor or another professional can help you manage expenses to minimize liability and reduce necessary payments at tax time.

Another con of selling a life insurance policy in a life settlement is that your heirs will not receive the death benefit. This is why GJ Financial Group thinks it is so important to educate policyholders that it is possible to sell only a portion of a policy in a life settlement (called a hybrid sale). That means the option to earn money on some of the policy’s face value while also retaining the benefits for family or other loved ones.

People over the age of 65 who no longer want or need a life insurance policy may wonder if they qualify to sell a life insurance policy in a life settlement. That’s why we created our life settlement calculator, to help policyholders make informed decisions about their assets and financial future. Or check out some of our life settlement success stories to learn more about how others have used this transaction to transform their lives and fund their futures, even during times of economic crisis.

Did you know you can sell all or a portion of a life insurance policy, even term insurance? Selling an unwanted life insurance policy is no different than selling your car, home or any other valuable asset that will create immediate cash. Contact us today to learn more.