Helping Fellow Seniors

understand

and benefit from

policy trade-ins

The Right To Trade In A Policy

A Supreme Court ruling grants Seniors Aged 65 & Older the option to trade in a life insurance policy for a lump sum payment.

The availability of this option creates a significant sum of redeemable income for Seniors with a policy that is no longer needed or no longer affordable, and gives all policy holders 65 & Over access to a financial resource previously unavailable to them.

Who Can Benefit From a Policy Trade-In?

The option to trade in a life insurance policy for payment is available to all policy holders aged 65 & older. For a subset of older Americans, choosing to trade in a policy makes financial sense, and can often be life-changing. Policy holders who would otherwise drop a policy are instead able to redeem it for payment. And Seniors who are struggling to pay for a large expense, such as medical care or assisted living, now have the option use money from a policy trade-in to cover those costs.

The Initiative

Each year, 5% of Seniors simply stop paying premiums on a policy that is no longer needed or is too expensive to maintain, unaware of the option to trade it in for payment. The Trade-In Awareness Initiative aims to spread awareness of policy trade-ins through outreach, and to provide free assistance to any Senior who would like to trade in a policy.

Lump Sum Payments

When trading in a life insurance policy, the policy holder receives a one-time, lump sum payment in exchange for forfeiting ownership of the policy. There are no restrictions on how this money can be used. Some Seniors trade in a policy for the specific purpose of covering a large medical or care facility expense, or to pay for living costs through retirement. Others use the money to fund investments, gift to charity, or cover education tuition.

Supreme Court Ruling

In the Supreme Court case Grisby vs Russell, the court redefined a life insurance policy as a personal asset, placing ownership of the policy in the hands of the policy holder, not the insurance company. Previously, a policy holder had only two choices: continue paying premiums, or forfeit the policy to the insurance company. This ruling enables policy holders 65 & older to treat a policy like any other owned asset. An unwanted policy can be traded, sold, or gifted, and the value of a policy can be redeemed if money is needed.

Types of Policies Eligible for Trade-In

Most types of life insurance policies held by individuals 65 or older are eligible for trade-in. This includes:

*Annuities

*Whole Life

*Universal Life

*Term

*First To Die

*Second to Die

*GroupĀ 

How To Trade In A Policy

Advocates are able to provide free assistance to any Senior who would like to trade in a policy. If you would like to do so, or you have questions about policy trade-ins, the first step is to speak with an advocate over the phone or email to verify that your policy is eligible and discuss how the process works. The advocate can then connect you with the appropriate licensed specialist for your policy. Advocates do not require, and will not ask for, sensitive personal information while assisting you.

Policy Trade-In Process

When trading in a policy, the policy holder legally transfers ownership of that policy to someone else, receiving a lump sum payment in exchange. The new owner will pay the premiums going forward and eventually receive the beneficiary payout. The trade-in is facilitated by a licensed specialist who secures a new owner on behalf of the policy holder, handles the paperwork, and oversees the transaction.

Would You Like More Information?

Advocates are committed to sharing information about policy trade-ins with fellow Seniors. If you have questions or would like to know more, please feel free to reach out to an advocate over the phone, through email, or via the contact form on the "Learn More" page.

Copyright 2023- Trade-In Awareness Initiative

Contact:

1-866-270-2488

info@seniorsrights.org