People are different in more ways than there is space or time to list. For this reason, the insurance needs of each person are also varied, especially when it comes to life insurance. If you're considering the idea of selling your life insurance policy, just because it doesn't make sense for someone else does not mean it doesn't make sense for you. Learn some of the scenarios where selling the policy often makes sense.
Number of Dependents
Any person thinking about selling their life insurance policy should first consider the number of dependents they have, as well as the level of financial responsibility they have towards them. For example, a person who is unmarried and does not have any children does not have any person that they have to worry about having a financial impact on after they pass.
In this instance, it may be okay to sell the policy. However, for someone with a spouse and children who rely on their income for financial support, the decision may not be as easy to make.
Payments Vs. Coverage
Just as all people are different, all insurance companies are also different when it comes to the services they offer. If you purchased your policy without research or you have had the policy for some time, the amount you're paying, or have paid into the policy may not be entirely worth the amount of your coverage you are receiving.
When the premium for the policy will total more than the amount of money your family will receive, it makes sense to at least consider the idea of selling the policy. If you're unsure of this information, calculate your premium over your expected lifespan and compare the figure to the policy payout amount.
You should also review your financial portfolio. For most people, the level of wealth they have as an older adult is more than they had during their younger years. For this reason, you may have purchased a large life insurance policy when you were young, but as you've made wise investments and saved, your financial portfolio has, and you have more assets.
If you are not confident that your family will need the life insurance policy based on your financial portfolio, it would again make sense to at least consider the idea of selling the policy. Your financial adviser can help you determine how viable your portfolio is.
Before you make the decision to sell your life insurance policy, you should sit down with a trusted professional. An agent can help you assess your situation and guide you through the process to ensure you're protected.