Do I have an attractive policy?

I'm going to start a series of posts to give people an idea about how attractive their life insurance policy would be in a life settlement transaction. If you aren't interested in all the gory details, you can cut to the chase and go straight to our life settlement appraisal tool. It's free, anonymous, and you get a response instantly.

Let's start out with the things that have the biggest affect on valuation.

Major Factors

1. Age and Health

   Typically you should be aged 70 or older before considering a life settlement. This can be lower if you are battling some health issues.

2. Face Value

   Pretty much a no-brainer here. Bigger policies fetch bigger life settlements.

3. Premium Payments

   Also a no-brainer. The lower the premium payments are, the more attractive your policy is.

4. Policy Type

   If you have a Universal Life or Whole Life policy, you're good to go. If you have a Convertible Term policy, it depends on what type of policy it converts into. If that's a Universal or Whole Life policy, then, once again, it's attractive. Variable Universal Life policies are difficult to sell do to the exposure of their cash balances to equities, commodities, and other riskier investments. This requires SEC over-site for the institutions transacting them and most buyers aren't interested. Term policies are also difficult to impossible to sell as they carry the risk of never paying their benefit.

So those are the major factors. In my next post I'll talk about some of the things that can hurt the valuation of your life insurance policy.