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Sale Of A Life Insurance Policy (Viatical, Life And Senior Settlements)

What Is A Sale Of A Life Insurance Policy?

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In general, a "sale" of a life insurance policy is the transfer by the owner of all rights and interests in the policy, as well as all the obligations assumed under the policy.

  • Right and interests that are transferred include the right to borrow against cash value, if any, as well as to appoint a beneficiary.
  • Obligations include the continuing obligation to pay premiums.

The sale price is always less than the full benefit payable at death. The seller receives the sale price to do with as he or she pleases. The purchaser takes over paying the premiums on the policy. When the insured dies, the purchaser receives the entire death benefit. The seller or seller's estate has no further interest in the policy.

To learn more about the process of a sale, see The Process Of Selling A Life Insurance Policy, Sale Of A Life Insurance Policy -- Frequently Asked Questions.

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