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Determining Your Life Settlement’s Value in Canada

Life settlements are gradually gaining attention in Canada, allowing individuals to realize potential financial gains from unwanted or unneeded life insurance policies. While the Canadian market may not yet match the size of its American counterpart, it represents an opportunity for policy owners who might otherwise let their policies lapse. Selling a policy into the life settlement market in Canada could bring significant benefits compared to simply surrendering the policy back to the insurance company.

Understanding Your Policy’s Worth

Calculating a life settlement value in Canada involves an analysis of several factors, such as the individual insured, the type of insurance policy, and market conditions.

Key Factors for Valuing Life Settlements in Canada

The valuation of a life insurance policy in Canada is impacted by these essential considerations:

  1. Age of Insured: Life settlements are typically more valuable for older individuals. The older the insured is, the closer the buyer is to a payout, enhancing the policy’s value. Most buyers focus on those aged 65 or older, although exceptions apply for those with chronic or terminal illnesses.
  2. Health of Insured: The insured’s health profile, coupled with age, plays a crucial role. Those under 65 with significant health issues may still be eligible for life settlements under viatical settlement provisions.
  3. Death Benefit: The death benefit amount of the policy directly influences its value in a life settlement. A higher death benefit often translates to a higher selling price.
  4. Premium Costs: Policies with lower premiums are more valuable, as they mean fewer expenses for the buyer. Fluctuations in interest rates or market performance may impact premium costs, which in turn can affect the settlement’s value.
  5. Policy Type: Different policy types have varying values. Term life insurance may be less appealing unless convertible, while universal policies are frequently sold, given their flexibility. Whole life insurance lacks this flexibility, which can impact its attractiveness.

Understanding the Potential Value

Generally, policyholders in Canada might receive anywhere from 10-50% of the face value or death benefit when selling their life insurance policy. This wide range is due to the factors mentioned above. As the Canadian market grows and more investors recognize life settlements’ potential, policy values might increase further.

Is a Life Settlement Right for You?

The decision to enter a life settlement is highly individual and may be driven by various factors such as increasing premium costs, changes in beneficiary needs, or requirements for funds to cover retirement, medical bills, or other expenses.

Life settlements in Canada offer a unique opportunity, allowing policy owners to unlock value from existing life insurance. As the market matures and awareness grows, this option will become a vital financial tool for Canadians looking to optimize their assets.

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 the value of your life insurance policy contacting the experts at Canadian Life Settlements today. <<”Apply for policy valuation today!” button

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