Usually the first question seniors ask after hearing that their life insurance policy may be worth much more than the cash surrender value is “How much is my policy worth?”

The calculation is simple enough:  Determine the insured’s life expectancy and multiply that by the annual premiums to estimate the expected cost of maintaining the policy.  Subtract the result from the discounted future value of the policy.

Your policy is worth the difference after fees.

Everyone uses the same companies for projecting life expectancy, but discount rates and existing portfolio composition vary among investors.  For this reason it is always a good idea to have many investors bid on your policy.

Fees can also differ a great deal among agents, brokers, investors and advisors.

A couple tips:

When evaluating a life insurance settlement, look for a free quote or calculation.  The settlement process should be clear and transparency of fees (who gets paid what) is non-negotiable.  A session with a licensed fee-based financial planner is recommended.  A fee-based planner will recommend the best course of action for you without the incentive of commission.