What is a Life Settlement?

A Life Settlement is  the sale of an existing life insurance policy. The funds generated  are greater than the policy's cash surrender value. Often the original  planning needs have changed so that the policy is no longer needed.  Premiums may have become a burden, and the original policy owner may  want to eliminate the life insurance policy by letting it lapse. Now  there is an alternative. The policy owner may sell his policy just  as they would sell a stock or bond, or even their home.

This secondary market gives the policy owner  a market that did not exist in the past. In prior years, the policy  owner was left with only one entity to deal with, their own carrier.  This exciting alternative allows the policy owner to obtain institutional,  and real market pricing for this valued asset.