He is Waiting for You to Die Because He Owns the Insurance on Your Life

“You have to be comfortable with the idea that astranger owns the insurance on your life,” says Philip Bouklas, anattorney in New York. Careful consideration is required when deciding whetherto sell life your life insurance policies. Although you can get large sums ofcash instantly, you might have a difficult time getting the most for yourpolicy. Additionally, there might be some tax implications.

Moreover, brokers are trying to make as much money as theycan off your death. Recently, a report on life settlements by the GovernmentAccountability Office in 2010 found that people were only being paid roughly13% to 21% of their insurance policy worth. The broker selling the policy takesa a commission from 9% -15%. However, in some states brokers are not requiredto disclose how much commission he will receive. You can avoid the commission byparticipating in direct selling. 

See Tom Lauricella, The Cost of Cashing Out Life Insurance, The Wall Street Journal, Jun. 29, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.