Are you selling your insurance? We’ve made selling your insurance as simple as possible.
While your initial thought on the process of selling your insurance policy may be to head down to your insurance company, this is needed only later on in the process.
Alternatively, you should first obtain a valuation that you are content with by approaching one or more third-party vendor(s).
The following outlines the course of selling an insurance policy:
- Source: Find a suitable & trustworthy third-party vendor in the market.
- Valuation: Send in the relevant information needed by the vendor for valuation. The insurance policy itself is the essential piece of document required for valuation. It should add information such as the start and maturity date, sum assured premiums, and surrender value (see below). Vendors usually offer the valuation for free.
- Review offer: The salesperson will return to you on their request. You can decide to continue selling at this point.
- Transfer: You can complete the transfer of policy ownership in 30 minutes at the Insurance company. Once this is finished, you will no longer have any outstanding obligations under the policy.
- Payment: Depending on the vendor, you will earn upfront payment either in cash or cheque.
What Are The Alternatives to Selling My Insurance Policy?
Surrendering my insurance policy
As mentioned beforehand, if you are looking to end your insurance policy, the alternative to selling it is to surrender your insurance policy.
Surrendering a policy involves you directly ending your policy with your insurance company. When this occurs, you will lose all the benefits under the policy.
Just like selling, surrendering your insurance policy may also enable you to receive a sum of money. This is called the cash surrender value. Though, this entitlement is dependent on your policy type.
Here are some pros & cons of surrendering your insurance policy:
|Relatively simple and straightforward process, which mainly requires you to contact your insurer directly.
||The policy type may not qualify you for any cash surrender value. For instance, whole life insurance comes with a cash surrender value, but not term life insurance.
|The selling & assigning of an insurance policy may let a third-party benefit from your (i.e., the insured’s) death. There is no such discomfort by surrendering your policy since all the benefits under the policy cease to exist.
||The value of cash surrender (if any) cannot be as high as the cash-back value of third-party sells that purchase insurance policies.
||Suppose you wish to buy back the insurance policy again in the future. In that case, the insurance company may not offer you a similar level of protection or returns for the same policy type.
What Would Happen If I Had Included My Insurance Policy in My Will?
If you previously included in your will to give your insurance proceeds after your death and insurance policy (which you had sold or surrendered), this donation will be invalid.
The reason is that the insurance policy is terminated, and it does not exist as described (whether by surrender or sale). Nevertheless, you could, for example, include an alternative clause from the on-set when planning your will to cater to such a situation.
To guarantee that you have provided for the possible circumstances that may arise concerning your insurance policies, consider getting professional legal advice from one of our will’s lawyers to assist you in your will-making.
Consider selling this to Endowment Exchange if you have a policy of endowment you have chosen to sell. Endowment Exchange purchases over existing endowment policies at prices higher than their surrender value, giving you more extra cash than if you were to surrender your approach to your insurer.