SELLING YOUR LIFE INSURANCE POLICY - By Jim Kaighn

You probably have heard on radio and television ads  that senior citizens can call a company called COVENTRY to sell them their permanent and term life insurance policies for cash.
If you look at it on the surface, it really sounds like a good deal for older people who figure they do not NEED their present life policy.. After all, their family has grown and moved off or they are coming up on retirement or have retired, there is no need for this bill. Let's say you have a $250,000 policy.. even though your main reason is gone, and if the premium is well within your ability to pay it, I would have you consider keeping the policy instead of selling it and here is why!!If you try to sell your policy you might find out that the company may not make you an offer IF YOU ARE IN GOOD HEALTH!!! In their thoughts you would live a much longer time frame before you would die ,making it a much longer period they have to wait to claim the policy for themselves.. THAT'S RIGHT..You see, they take over your policy and when you die, they claim all the benefits for themselves..But, as far as you are concerned, that is not for you to worry about, because when you sold it to them you might get 30 or 40 or 50%  of the amount of insurance, and THEY get the rest upon your death..And here is the fun part for you and your family, that money you get from selling your policy is TAXABLE AS CAPITAL GAINS which could be between 15%  and 20% using 2017 tax rates.. Now you do get a break from the total you receive by subtracting ALL YOUR PREMIUMS YOU HAVE PAID OVER THE YEARS, then you pay tax on the remainder.. But, you will have much less then you thought you would  get..
Also, like I was saying earlier, if you are healthy, they might not buy your policy or they will offer you a much lower amount.. What they are looking for, is someone in bad health and likely to die within a few years, so they can collect the money from the policy in a quicker manner, to keep their business going.. They can not afford to be waiting 10 or 20 years  for someone to die!!

Now, back to the idea of you keeping the policy.. Instead of your family getting a small portion of the policy NOW and paying taxes on that amount, if it is affordable ,keep it and when something does happen to that member of the family , Receive the ENTIRE VALUE OF THE POLICY and PAY NO TAXES!!!!!!!!!!!!!  Now, if a family is in deep money problems, then this would be a good thing to do to help them out, but I WOULD GET FINANCIAL COUNSELING FROM AN ATTORNEY OR AN ACCOUNTANT to explain the problems for your family.. Do not do this on your own!!  If you younger members of a family are knowing that your parents or grandparents are thinking of doing this, tell them to get professional advice, before they make a mistake they can not recover from..Well, folks, that is my advice for this month.. I can be reached for personal advice on any insurance topic at 252 335 5983, or my cell 252 202 5983, or my e-mail www.insdr@roadrunner.com.....Thought of the month:: IF YOU ARE TRYING TO ATTAIN WISDOM, YOU ARE WISE.. IF YOU THINK YOU HAVE ATTAINED IT, YOU ARE A FOOL!!  Until later, HAPPY TRAILS!!!