By now you probably know that a client’s life insurance policy can be sold for cash, and that investor groups buy these policies for their portfolio return and diversification. And, you may know, that all different types of policies can be sold, including term policies.
Generally, term policies need to be convertible (and not past the conversion deadline) in order to be sold. But, did you know that non-convertible term policies also have the potential to be sold?
Yes, it’s true.
Certainly, the vast majority of term policies do need to be convertible to be sold, but that does not automatically exclude term policies that are no longer convertible. Every investor group has its own parameters, and not all will even look at a non-convertible term, but some will.
Here are two examples of clients who benefitted from the sale of their non-convertible term policies this year.
This client is 78. He has cancer, but he is not in a viatical situation (with less than two years of life expectancy).
The policy was a $250,000 non-convertible term that had five more years left until the end of the term.
First, why would the client want to sell his policy?
He bought the policy years ago, to take care of his wife, in case something happened to him. She passed away four years ago. His current beneficiaries are his daughters. But, in his words, they do not need the money. They and their families are successful.
The client wanted to sell his policy to make his life more comfortable while he is still alive.