Top Reasons for Abandoning a Life Insurance Policy

With an ever-growing sense of financial freedom, these days, many senior citizens are dismissing their life insurance policies in exchange for other options. Usually, this occurs because of inadequacies in that life insurance plan. However, other factors, also, influence the decision to abandon a life insurance policy.

Sometimes, the policyholder deems the policy as unnecessary for their current lifestyle. The passage of time has made their policy obsolete.

The passage of time, also, can result in changes for the issuing insurance company. Sometimes owners of an insurance policy will abandon their policy because they find out that the issuing company has been sold or is in the process of being sold. When a life insurance company is liquidated, the insurance owner has no choice but to attempt to extract the cash value from the policy of the liquidated insurance company.

Personal economic hardship can strike at any moment. When this happens, an insurance premium may prove too burdensome for financially unstable policyholders. Naturally, these policy owners may decide that it is in their best interest to abandon their policies and simply sell them.

In some unfortunate cases, the insured person outlives the policy's beneficiaries. In more fortunate cases, the policyholder no longer requires the financial security that the life insurance provides.

Sometimes, an insurance policy is gifted to a nonprofit organization or it is sold through a life settlement and the proceeds are gifted to the nonprofit organization.

In some sad cases, insurance policy owners are fraudulently persuaded to drop their policy so an unscrupulous insurance agent eager to receive a commission for selling a new policy can replace it. Or, an agent may have made un-true claims that the policy would fund itself after a certain number of payments, but the economy or business decisions made the insurance company render such promises baseless and false. When this happens, the insurance owner may become discouraged by the need to continue paying premiums and decide the prudent thing is to abandon or sell their policy.

Some policyholders are lured to drop an insurance policy when they become convinced that another insurance policy offers superior benefits. When this happens, the policy owner may benefit from looking into selling the policy via a life settlement and, then, purchasing the superior plan.

Not all insurance companies are equal. Nor are all insurance products equal. Poor quality life insurance often detracts from a senior citizen's quality of life. High premiums can divert funds needed for health care and other important priorities. When this becomes apparent to the policy owner, he or she may choose to abandon the plan.

Of course, some abandon an insurance plan because they are financially savvy and they want to receive optimal return their assets. Life settlements provide a strategy by which to accomplish this.

The bottom line, simply is this: To keep on paying premiums for an insurance policy that no longer fits your financial plan and your financial needs does not make sense. If this seems to describe you and your situation, you may want to give serious consideration to a life settlement contract--and sell your life insurance policy.

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