Besides providing loved ones with a source of funds for income replacement in the event of an untimely death of the family’s breadwinner(s), people buy life insurance for a variety of reasons:

• To fund a buy-sell agreement or key person insurance for a business.
• To satisfy a lender’s requirement when a loan was made.
• To fund expected estate taxes that might have decreased since the policy was taken out.

Whether it was one of these needs or something else, circumstances change and sometimes people find that they no longer need, or perhaps can no longer afford, policies that were taken out several years ago. If this describes your situation, before you allow a term life policy to lapse (or turn in a whole life policy for its cash surrender value), we recommend that you consider whether it might be more beneficial to sell the policy. Known in the industry as a life settlement, selling a policy can sometimes net the policyholder a sufficient sum that’s far in excess of a whole life policy’s cash surrender value or a term policy’s unearned premium. An ideal candidate for a life settlement is an insured individual over the age of 70 who no longer needs or wants the life insurance policy and who has experienced a significant change in health since the policy was bought. If you have an unneeded policy that you’re thinking about getting rid of or just letting it lapse, we’d be glad to talk to you about whether it might make sense to try to sell it instead. © 2014