Pay Attention to the Resale of Life Insurance from Insurance Companies

Dubious traders of used life insurance on the market

Life insurance customers in financial distress should be alert: Anyone who tries to sell their policy on the open market is exposed to incalculable risks. In the end, they might register a total loss. "The serious secondary market for used life insurance is dead," warns Harry Chester. The chance to make a little money from a policy this way avoiding cancellation is currently close to zero. Instead, the danger of being deceived is growing. If in doubt, it is better to shut down the policy rather than terminate it. Be sure about the insurance that you have. A lot of insurance companies are now offering reliale insurances. Aside from life insurance, medical insurance is also available.

The Internet is full of offers for the purchase of life insurance. There is no surprise about that: about 94 million policies are terminated every second. Interested in getting payments of "up to 200 percent of the cash surrender value, the insured get so much more money than the amount the insurance company would pay for early termination of the policy.”One has to give something even if Christmas is approaching", Chester calls for caution. His urgent advice: Stay away. This type of policy trade is still illegal. The Financial Supervisory Authority has already classified the business as unauthorized deposit business and providers have been recently forbidden to operate.

Bad trade

Larry Gasket of the Federation of Consumer Organizations in Boston advises those who want to exchange their policy against a completely insecure business to reconsider. The catch: Those who make the offers do not pay large amounts of money at once, but distribute it in installments over seven or ten years. If the customer wants to put their hands on the money right away, that is not possible. According to BaFin, sometimes there are 70-year-old customers who are satisfied with monthly installments over 32 years.

At the same time, rogue collectors terminate the policy and invest the money from life insurance on the gray market, as Chester explains. And at worst, the seller has to run after their promised withdrawal. Additional catch: The life coverage is also sold away with the life insurance.

Secondary reasons to fear for your reputation

"We are looking for people who complain about problems with the partial payment", said Kirstin Becker from Boston. "Our concern is that this kind of party affects the reputation of the legitimate secondary market," said Tom Fisher, Chief Executive of the Association of Investments in the Secondary Life Insurance Market. The times are already tough enough. The once flourishing life insurance trade was brought down to its knees by the financial crisis. Legitimate companies now have no more policies to clamp their insurance customers.
Many serious collectors such as the Los Angeles-based company Cash Life are sitting in the terminal. "We get thousands of requests each month, but they only take small amounts and are very selective," says Jack Rumble, legal advisor of Cash Life.

The permanent low interest rate level is very difficult for the industry to deal with. The policy is often pre-financed on credit. The higher the lending rates, the more the profit margin decreases. Moreover, the returns of many insurance policies tend to reach bottom levels. And therefore, there are no buyers of the policies. Get your life insurance and medical insurance from reliable and trusted insurance companies to get the returns that you deserve.

First look for advice and only then make a move

“He who is relatively new in the life insurance field and wants to sell his policy has an urgent need for money or wants to get rid of the installments,” says Becky Rich. The consumer is left with not much choice after selling the policy to reputable dealers but to be content with the meager cash surrender value offered by the insurer. Contracts that run for 15 years or even longer, however, would be kept and they are only contributory. In case of warranty rates of 3 or even 4 percent, it is smarter to wait until the maturity date. If you are lucky, you get paid more surpluses at the end. "Whether it is worthwhile to keep it is something the consumer centers can estimate," says Becky Rich.

Another solution to the financial plight may be the leasing of the policy, often up to the amount of the surrender value. This is usually "a wonderful solution," says Chester. The insured retains their insurance coverage and is financially liquid very quickly.