Can I sell my long-term care insurance policy?


Q. Can you advise me on the feasibility of selling my long-term care policy?
— Policyholder

A. Long-term care insurance can be an important part of your financial plan.

But we do know it can be prohibitively expensive.

Can you sell it?

Let’s start with life insurance.

In the life insurance business, there is sometimes a secondary market for permanent life insurance policies, said Melissa Raimundo, a certified financial planner with Beacon Trust in Morristown.

“The way that this works is that if you decide you no longer want your life insurance policy you can sell it in the secondary market, and then the purchaser assumes all future premium payments and gets the death benefit after your passing,” she said. “This is called a viatical settlement or a life settlement.”

The difference between a viatical settlement and a life settlement is that in a viatical settlement, the policy sold is sold by an insured who is terminally ill, while a life settlement is sold by an insured who is not terminally ill and has a longer life expectancy, she said.

The amount you receive when selling a life insurance policy generally is greater than the cash surrender value but smaller than the death benefit amount, and there are often additional fees associated with the transaction, she said.

“While sometimes clients sell their life insurance to fund long-term care costs in old age, viatical, or life settlements are generally not available for pure long-term care insurance policies,” she said. “There may, however, be an option to sell hybrid life and long-term care insurance policies but the value lies in the life insurance portion of the policy and not the long-term care portion.”

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This story was originally published on May 17, 2023. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.