When financial circumstances change or a life insurance policy no longer serves its original purpose, many people don’t realize they can tap into its value without giving up the entire benefit. Life settlements offer a flexible way to access funds while still keeping coverage for your loved ones. Here’s how you can leverage this option through partial policy sales or Retained Death Benefit (RDB) settlements.

What Are Partial Policy Sales?

You don’t have to sell your entire life insurance policy. With a partial policy sale, you can sell just a portion of your coverage and keep the rest. This gives you immediate cash while maintaining some life insurance protection for your beneficiaries. Even better, the buyer will take over all future premium payments.

For example, if a client has a $1.25 million policy, they could choose to sell $1 million of it, receiving upfront funds for the part sold, and retain $250,000 in coverage.

Key Features:

• Immediate cash for the portion sold.
• No ongoing premium payments.
• Keep a portion of your policy for beneficiaries.

How Retained Death Benefit (RDB) Settlements Work

With this approach, you sell the entire policy, but instead of receiving a large cash payout upfront, you retain a greater portion of the death benefit. The buyer assumes responsibility for all future premium payments, relieving the seller of any ongoing obligations. Upon policy maturity, the beneficiaries receive the agreed-upon retained portion of the death benefit, while the remainder goes to the purchaser. This option is ideal for individuals who want to maintain death benefit coverage for their beneficiaries but are less concerned with receiving immediate cash.

Key Features:

• No ongoing premium payments.
• Maintain a significant portion of the death benefit.
• Ideal for those who prioritize long-term benefits for loved ones.

Client Success Story

John, 76, had a $700,000 insurance policy but was struggling to meet the premium payments. He decided to sell $600,000 of the policy, receiving a significant cash payment while keeping $100,000 in coverage for his beneficiaries. This strategy provided him with financial relief without fully giving up his policy.

Are you considering a life settlement for your life insurance policy? Wondering if you’re eligible to sell your life insurance policy? Learn more about selling your policy and find out if you qualify for a life settlement by contacting the experts at Canadian Life Settlements today.