I don’t have any family to leave my life insurance policy to. Do I have to be sick to collect on the policy while I’m still alive?
It is possible that you can collect on your life insurance policy in your lifetime, although you will receive only a portion of its full value.
If you are the owner and the named insured person on your policy, you may want to look into viatical and life settlements. Viatical settlements are generally available only to persons who, because of illness, have a life expectancy of no more than two years or so. Policies involved in viatical settlements often have a face amount of less than $100,000. The face amount is the amount of money to be paid to the beneficiary when the insured person dies. Life settlements often involve much larger sums of money and are considered by some to be a good financial planning tool. A relatively healthy, affluent person 65 or older with a large life insurance policy might consider a life settlement.
Before entering into a life insurance settlement transaction, discuss the matter with trusted friends and financial advisors. Don’t sell your life insurance policy if there is any possibility that you may regret it later. In addition, you’ll want to be aware of associated costs, such as payment of taxes on the money you receive. Also consider contacting your state's insurance regulatory agency to learn whether any life settlement or viatical settlement provider you are thinking of using is reputable and is licensed to do business.