In Singapore, you can sell your life insurance policy or endowment plan through a process known as policy resale or absolute assignment. This involves fully transferring ownership rights from the original policyholder, known as the assignor, to another person or entity, referred to as the assignee. Once the transfer is complete, the assignee gains full control over the policy and assumes all associated rights.
This option allows policyholders to cash out their policies before maturity by selling them to specialized companies or investors who are willing to take over the remaining tenure. Instead of surrendering your policy to the insurer for a lower value, policy resale offers a potentially higher payout, providing financial flexibility.
Many people choose to sell their policies for various reasons. Some may need immediate cash for emergencies, major expenses, or investment opportunities. Others might have an insurance plan that no longer aligns with their financial goals, or they might have found a better investment alternative. By selling a policy, individuals can liquidate an asset that they no longer need while optimizing their financial returns.
Can I Sell My Life Insurance Policies
Not all life insurance policies can be sold. Whole life insurance and endowment plans are generally eligible for resale, as they accumulate cash value over time. Term life insurance, on the other hand, is usually not eligible because it does not have a cash value component. Some investment-linked policies (ILPs) may also qualify, but eligibility depends on the specific terms, policy structure, and insurer regulations.
To determine if your policy can be sold, it is best to consult with a licensed policy reseller. They will assess key factors such as the policy’s current cash value, the duration remaining, and any applicable bonuses. The eligibility of a policy may also depend on the health condition of the policyholder, as some investors prefer policies where medical underwriting has already been completed.
How to Sell Your Life Insurance Policy
To sell your policy, you will need to work with a reseller or broker who specializes in the secondary insurance market. In Singapore, companies such as ours specialize in buying second-hand policies, providing an efficient and transparent process for policyholders looking to cash out early.
As a professional policy reseller, we assess various aspects of your policy before making an offer. Key factors include the cash value, premiums paid, policy bonuses, and the remaining duration of the plan. The offer you receive is typically higher than the surrender value provided by the insurer but lower than the policy’s full maturity payout. This ensures that sellers get the best possible value while providing attractive investment opportunities for buyers.
On Selling Your Life Insurance Policies
Once you have received an offer and agreed to the terms, the next step is to transfer ownership of the policy. The new owner, usually an investor, takes over the policy, assuming responsibility for all future premium payments and becoming the beneficiary of any policy payouts upon maturity.
The transfer process is legally recognised, and insurers must approve the ownership change. As part of the process, documentation will be required, including policy details, identification documents, and legal agreements to facilitate the transfer. Once the transfer is completed, you will receive your agreed cash payout, effectively liquidating your policy.
Is Selling Better Than Surrendering?
One of the main advantages of selling your policy instead of surrendering it to the insurance company is the potential to receive a significantly higher payout. In most cases, policy resale provides 10-30% more than the insurer’s surrender value. This additional amount makes policy resale a more attractive option, especially for those who need liquidity but want to maximize their returns.
Unlike surrendering, where you may receive only the guaranteed cash value from the insurer, selling your policy allows you to benefit from the accumulated bonuses and projected payouts, which would otherwise be lost. If you are considering early termination of your policy, it is advisable to explore resale options first before proceeding with surrender.
Common Concerns on Selling Your Life Policies
Many people have concerns about the financial and legal implications of selling their policy. Fortunately, selling your insurance policy is pretty clearcut. Once ownership is transferred, you have no further legal obligations, as all future premium payments and policy benefits are assumed by the buyer.
Another common concern is whether policies with outstanding loans can be sold. Some resellers accept policies with existing loans, but the offer price will be adjusted accordingly to account for the outstanding balance. It is important to disclose any policy loans upfront to get an accurate valuation.
Payment Method After Sale
After providing policy details, we assess the policy and present an offer. The assignment process can be completed as soon as the next working day at the respective insurance company, taking approximately 30 minutes. We provide upfront payment, either in cash, bank transfer, or cheque, upon completion of the absolute assignment process at the insurance company.
Next Steps
If you’re thinking about selling your policy, it’s essential to work with a reputable and licensed reseller like us to ensure a smooth and legally compliant transaction. Our experts will guide you through the process, provide a fair valuation, and facilitate a seamless transfer of ownership. Contact us for an interim quotation on selling your life insurance in Singapore.
Disclaimer
Every effort has been made to ensure the accuracy of the information provided, but no liability will be accepted for any loss or inconvenience caused by errors or omissions. The information and opinions presented are offered in good faith and based on sources considered reliable; however, no guarantees are made regarding their accuracy, completeness, or correctness. The author and publisher bear no responsibility for any losses or expenses arising from investment decisions made by the reader.
