November 5, 2018

How Much Is My Life Insurance Policy Worth?

What is the value of your life insurance policy? It’s not as easy as you may think to determine what the value of your life insurance policy is. The key factors that are necessary to determine the value of your policy include three items: your age, health condition, and the type of life insurance policy you have. An estimate can be done based on the face value (net death benefit) of your policy, but to get a more precise value, the policy details are important. The policy details can be determined by reviewing an “in-force illustration” which can be obtained either directly from the life insurance company or your life insurance agent.

Life settlement investors take the information from the illustration to figure out what premiums are projected to be paid over your lifetime and combine that with your medical condition to estimate the timing of the payout of the death benefit on the policy. In the life settlement industry, this would be called a probabilistic discounted cash flow analysis.

Many life settlement companies have a pricing tool on their website to provide an initial estimate of your policy’s value. Feel free to try our calculator and see if your policy has the residual value to make it a good fit for a life settlement opportunity.

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Contact Q Life Settlements