You will usually only be offered a small percentage of the total value of your insurance policy, if you decide to sell it. The upside of this is that you will get the percentage right away, but the beneficiaries that were originally listed on the policy will receive no value after your death. The actual size of the percentage you receive depends on a number of factors. It is determined by business men and other people who may be interested in buying your policy. Different people will be willing to pay different amounts for it but everyone will usually make offers within a relatively close price range.
The first thing potential buyers will consider is the total amount of money the policy will pay out after the insured dies. If the insured is terminally ill, they are much more likely to get a higher percentage of the total policy than someone in excellent health. A young and healthy person in their mid 20′s will usually have trouble selling their policy at all, and even if they do manage this, they aren’t likely to get a very good percentage of the money. On the other hand, a perfect healthy 70 year old will almost certainly get a pretty decent percentage. If the person in question has a disease, the exact type of disease is also important when figuring up the sale price.
A disease that has no cure is likely to get the party who wishes to sell more money. The chances of the insured recovering are low in this case, so the buyer could reasonably assume they would not have to wait an extremely long period of time before the policy pays them off. The exact terms of the policy are another important factor to be taken into consideration. Some life insurance policies will have stipulations that state the principal amount to be paid to the beneficiaries upon death of the insured that can be altered under certain conditions. It is important for anyone who wishes to buy life insurance policies to have a complete understanding of the terms of the policy.
The premiums can also be subject to change in many cases and an investor will definitely be taking such things into consideration. Generally speaking, the longer you are expected to live is directly related to the price you are likely to get for your policy. If someone can not reasonably be expected to live very long, they can actually get a reasonable deal when they sell their insurance. A person with a life expectancy of 6 months or less has a good possibility of finding someone who will pay out 80-90% of the total value. Buyers are generally very pleased when they find deals like these because it is such a low-risk investment that will pay off in the short-term. It is important to consider how businessmen calculate what your policy is worth before you start hearing offers. Otherwise, you cannot be confident that you are making the wisest possible decision.