A Strategy for Dealing with Rising Life Insurance Costs

Published October 10, 2019

older man gardening in the summer

In recent months, many seniors have been hit with an unwelcome surprise as many insurers are raising their life insurance premiums. When a life insurance policy becomes too expensive to maintain due to premium increases, the owner can be faced with some difficult decisions.

Consider this story: Jane is an 84 year-old woman who owned a Universal Life insurance policy with a death benefit of $100,000, originally purchased to provide some extra income to her husband in the event of her death. Her husband passed away several years ago, but she kept the policy for her children and grandchildren. She lives on a fixed income, so when she received yet another premium hike from the insurance company, she could no longer afford to keep the policy.

Jane was faced with a dilemma. Should she surrender the policy back to the insurance company for just $600 in cash surrender value? Then she heard about Coventry Direct and the possibility of selling the policy through a life settlement. After learning that she qualified for a life settlement, she received $9,500 for her policy – 10 times what she would have received from her insurance company. Jane was able to use the proceeds to supplement her retirement and travel, much to the delight of her children and grandchildren.

If you are among those policyowners facing an increase in premiums that will make your life insurance too expensive to keep, there are a few things you can do:

Surrender the policy back to the carrier. Although the cash payout from your insurance company will be a fraction of the death benefit that you had established for your heirs, surrendering the policy will eliminate an annual payment you may not be able to afford.

Explore a life settlement. This may be a more attractive alternative to surrendering your policy back to the carrier. Coventry Direct can help you learn whether a life settlement might allow you to sell your policy for an immediate cash payment that may be more than what you would receive from your insurance company.

Keep a portion of your insurance and eliminate the premiums. It may be worth considering how much coverage you truly need. With a life settlement you can choose to keep some of your existing coverage while eliminating all your premium payments.

To learn more about your options and whether a life settlement is right for you and your family, contact us or call 1-800-COVENTRY.

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