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What is a Life Insurance Policy Appraisal?

What is a Life Insurance Policy Appraisal?

Do you know how much upfront cash your life insurance policy could be worth? Selling your life insurance policy could be worth more than what you would receive if you canceled or surrendered your policy to the insurer. If you're 75 years old or older, your life insurance policy may be worth more than you think.

A life insurance policy appraisal is an evaluation of your life insurance policy's monetary worth. When you have a professional appraisal performed for your life insurance policy, you'll find out the cash amount you'd likely receive for selling all or a portion of the policy. With the rising costs of monthly premiums on today's life insurance policies, you may decide that selling it is an excellent way to achieve greater financial freedom, especially if you were looking to exit your policy anyway.

Selling your life insurance policy would allow you to save the money you've been spending on the monthly premiums and also to get additional cash right away to pay bills or whatever else you choose. Seniors are now facing risings costs of healthcare and financial instability as we enter an economic recession. Selling a life insurance policy presents an excellent opportunity to get back the money you've already been putting aside for years and to ensure financial stability for the future.

You won't know the actual value of your life insurance policy until you have a professional appraisal done. If you've already looked into selling, having an appraisal performed by an unbiased third party can help you determine whether you're getting a good deal from a life insurance policy buyer or if they're attempting to take advantage of you.

How much money can you get from selling? Several valuation factors go into determining the cash value of your life insurance policy, such as:

Your health records

If your health has declined since your life insurance policy started, it increases the amount your policy is worth. Presenting your health records, age, and life expectancy can help you get a higher appraisal and ensure that you get the most money from a buyer.

The face value of your policy

The face value is the amount of death benefits your policy will pay in the event of your death. The higher this amount, which depends on the company, and the policy you choose, the higher your policy's cash-out value will be.

The number of premium payments you've already made

The more monthly premium payments already made on your policy, the higher its value will be.

Policy type

The type of life insurance policy you have also determines its value. Generally, universal life coverage has the highest value, whereas term coverage offers comparatively less.

Policy loans

If you've taken out a loan on your policy that remains outstanding, its value will be reduced.

Finding out the value of your life insurance policy enables you to know what you stand to gain if you sell it. Whether you need cash now or want to gift a loved one with the money you've invested in your policy, keep in mind that selling your policy will likely leave you with more money than if you cancel your policy with the insurer.

Stephen E. Terrell

Stephen E. Terrell is president of Life Guide Partners. He may be contacted at stephen@lifeguidepartners.com.