Are you a parent of young or older children and wondering about the usefulness of your life insurance coverage? Plenty of moms and dads go through the same thought process every day as they begin to question the need for high premiums on policies and whether the money could be put to better use. Of course, there are good reasons to carry coverage, like making sure surviving loved ones are not left in a difficult financial situation, to pay off a mortgage should you die young, and more.
But as many grow older, and as their children reach the teen years, high premium policies don’t always make as much sense as they did when you purchased them. The good news is that just about anyone can sell their life insurance policies for cash. Plus, if you’re a parent who needs the money right now, the process is simple, fast, and can all be done online. But first, it’s important to understand what sets parents apart from single people and childless couples in terms of insurance needs.
Unlike single adults, parents have young lives to oversee. That duty usually ends when children reach adulthood, but many dads and moms purchase life insurance policies with the intention of covering expenses related to raising children. So, when the youngsters get ready to set off for college or are in their late teens are already in a first job, the need for long-term financial protection becomes less of a priority. When that happens, many parents consider life settlements. How do these unique contracts work and what does it take to initiate the process?
If you wish to sell a life insurance policy for cash, it’s essential to understand the mechanics of the transaction. For starters, you’ll get a percentage back, namely a portion of the total benefit amount, but will usually receive more than the surrender value. The key advantage is that you get the money immediately, no longer pay premiums on it, and can use the funds for anything you want, including college-related expenses, a vacation, to pay off your house, or just to stick it into the bank. The point is that it’s up to you to determine what to do with the cash you receive from a life settlement. How do people use their early life insurance payouts? While there are dozens of ways parents use the funds, the following are the most common.
Emergencies happen, especially to mothers and fathers who are raising one or more children. Medical bills, the loss of a job, disability, and other life interrupting situations have a way of placing undue financial stress on a family at just the wrong time. When that happens, anyone who has life insurance coverage can turn to the contract as a way of overcoming a particularly difficult money crisis. Fortunately, should you find yourself in a similar situation, it’s good to know that a life settlement can be a backup source of money to cover unexpected bills and weather a crisis.
Many working adults with families simply discover that their premiums are putting too much of a strain on the monthly budget. That, coupled with other factors, often leads parents to decide to sell a policy and recoup some of the available value while they have a greater need for it. The advantages of selling offer a double advantage. Not only do you avoid ever having to pay premiums again, but you also enjoy an immediate influx of cash that can be used for any purpose you desire.
The perfect storm of circumstances often gets one or another parent to thinking about using a life settlement transaction for their financial benefit. For instance, when your youngsters are grown and have left home, and you are nearing retirement, it can make perfect sense to say goodbye to premiums and coverage you no longer want or need.
Outside of emergencies, many moms and dads decide that instead of shelling out cash for premiums, they could put that money, and the cash from a life settlement, to much more productive use. It’s relatively common to use the cash for college tuition, to pay for a wedding, or to place in a trust for grandchildren. These non-emergency uses are typical things a parent might want to do with proceeds from a settlement. However, college and university tuition are one of the more popular uses because it’s an efficient way to help young adults begin their careers without heavy student debt.
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