Seniors who need to pad their retirement nest eggs have the option of selling off their life insurance coverage, but financial advice website Bankrate.com says there are some pitfalls which must be avoided.
For one thing, Bankrate says, it's often a good idea to include a financial professional in the decision-making process for a life insurance liquidation, since they can help consumers learn the cash value of their policies and determine whether such a move would be worth it to begin with. Getting multiple offers and collecting medical records are also crucial steps to maximizing one's return.
The website also notes, though, that the current state of the secondary life insurance market favors buyers over sellers. One outside expert told Bankrate the high offers seen three or four years ago cannot generally be found now.
Regardless of how well-prepared older consumers are to conduct the transaction, experts say it's sometimes a better idea to simply hold on to life insurance coverage, since it can provide security and, in some cases, investment income.