subject: Your Life Insurance Policy & Why You Should Sell It [print this page] People often make the mistake of identifying life insurance as a positive investment. Actually this is incorrect. Positive investments are those like investments in property, shares, mutual funds, bullion etc. You can sell them whenever you like and earn profits if their market value on the day of sale is higher than the value they were purchased at. Life insurance policies are not the same.
Statistics reveal that nearly 90% of life insurance policies are paid pre maturely, on the death of the insured. This means that the person, who is insured, and has spent a major part of his life paying premiums, will no longer be there when the time comes to collect the maturity amount. The insurance company's documents contain cleverly worded text. It is also the same with their agents. They will convince you by stating that in the unfortunate event of your demise, the total sum insured will be paid to the beneficiary appointed by you.
So what is the gain for the insurance company? Why should you sell your life insurance policy? If you expire prior to the completion of the term of the policy, the sum assured is given to your beneficiary. You too get the sum assured, if you are alive till the time of maturity of the policy, right? Wrong You also get special bonuses and incentives that are as much as the sum assured.
Say your life insurance policy is of $250,000 and you die before the maturity date of the policy. In such a scenario your beneficiary will only receive the same amount plus a small bonus amount that is calculated by the insurance agency. In specific cases the amount paid will be less than the insured amount when the insured passes away within 2-3 years of starting the policy,.
Compare this with the $500,000 you would have received had you managed to stay alive for the term of the policy. Few persons manage to do so, hence it is wise to sell your life insurance policy and invest it in something that you can redeem whenever you like. You have the option of surrendering the policy to the insurance company for a small sum of money. Or you can go in for life settlement and sell your insurance policy in the open market for a greater sum.
by: Lauren Kyle
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