Don’t Let Your Life Insurance Lapse Because of High Premiums

The Great Recession has been the proverbial economic slap in the face for the vast majority of us. Part and parcel to this, most are looking to cut costs and horde money as we hope to survive these troubling times. For many, that means terminating their life insurance given the high premium payment amounts.

It is amazing to consider how much things can change in three years. In 2007, most of us were living high on the hog. Big cars. Bigger houses. Mortgages the size of the national debt of Japan. Ah, the good old days. Alas, things started to turn and then quickly did a 180 turn before most of us knew what hit us. Now real unemployment is up in the 17 percent range, the government is printing and spending money like it is toilet paper and things just do not look good.

What can we do? Most of us have reacted by slashing our spending and rightly so. Ultimately, this is a good thing, but it is a painful process as I am sure I don’t have to tell you. For many, an accounting of what is really necessary and what is not is being undertaken. That includes the need for life insurance policies.

Life insurance is not cheap. I don’t have to tell you that. The fact premiums go up as you get older makes this particularly true. The question for many is whether it makes sense to keep paying on something that is only going to pay out after death? The answer is often that it is not and policies are being allowed to lapse.

Letting a life insurance policy lapse may be necessary, but it should not be your first step. The first step should be to try to sell it. Yes, you can sell policies. There are two methods. The first is known as a viatical settlement, where you sell it because you are very sick. The second is known as a life settlement, where investors will buy the policy if you are in your mid sixties or older. You majority of people will not fit into these two categories, but those that do will be able to reap tens or hundreds of thousands of dollars from their policies.

That is much better than letting a life insurance policy expire.

Thomas Ajava writes for LifeSettlementLifeInsurance.com - providing independent life settlement life insurance broker services to insurance policy holders.