Understanding Life Insurance Policy Valuation

Life insurance policy valuation is the process of determining the financial value of a life insurance policy. This evaluation considers various factors, including the policy type, coverage amount, cash surrender value, premium payments, and the insured individual’s age and health. It is essential for situations such as estate planning, policy sales, divorce settlements, or assessing assets for financial purposes. The valuation process may involve consulting actuarial tables or engaging professionals to ensure accuracy. Accurate valuation helps policyholders or beneficiaries understand the policy’s true worth and make informed decisions regarding its use or potential transfer.