What to do if you no longer want an old insurance policy?
Times of need, surrender take out a loan or sell…?
We all know the importance of protecting ourselves, our families, and our businesses with insurance. Insurance can be vital in times of need, helping to ensure we do not run into severe financial difficulty. However, with ever-increasing insurance premiums and the possibility we may have signed onto an insurance policy with questionable value, you may be left in a situation where you have no choice but to take action.
In the past, if you could no longer afford your insurance premiums but were desperate to continue the coverage then the next logical step would have been to take out a loan to pay for the premium on the policy. With the heavy interest that could be involved this cannot be a long-term option. You would need to be confident that your financial struggles were rather short term, meaning once you take a step back and realign your budget and finances, you could rather quickly alleviate yourself from the burden of the interest paying loan.
If you could no longer afford your insurance policy, or were no longer keen on continuing your current policy for whatever reason (such as finding a better value deal elsewhere), then your only option used to be to surrender your insurance policy to your insurance provider. In this instance, they would pay out a certain percentage of your remaining premiums before taking out an administrative fee. As we can see this is not necessarily a financially wise option, but sometimes we understand you may feel like you have no choice.
It is clear now that insurance agencies actually make more money when you surrender your insurance policy. This could be the reason that insurance providers are not quick to highlight a third, potentially more lucrative option. In today’s world, you could actually sell your insurance policy to a buyer or broker. This can be more worthwhile than surrendering your insurance policy back to your insurance provider.
Thankfully, the process of actually selling your insurance policies is a rather simple one. You normally just submit your policy details, along with a benefit of illustration, where it is then evaluated by analysts at an insurance policy brokerage or buying firm. They then come back to you with a no obligation quote. Then depending on whether the company is buying the policy directing from you, or helping you broker a deal with a buyer, you can end your obligations to the policy and walk away with cash.
Hopefully, in this article, we have given you the knowledge and confidence to explore your options properly if you ever need to cancel your insurance policies.
This article is provided by Kashfrov, Asia’s first Life Insurance Settlement Exchange, a financial platform with a goal to bring liquidity and transparency to the life settlement insurance secondary market. Headquartered in Singapore, it was founded to provide and educate the masses — from individuals who own an existing endowment or life insurance policy plan to people who deal with high net worth are interested in investing in an alternative asset.
Disclaimer: This article is not investment or financial advice. Different financial products and services will suit different individuals as we all have our own needs and preferences. Therefore, it is always imperative to shop around, get as many quotes as you can and pick the best option for yourself.