What is a Life Settlement?

 A life settlement, is simply put, the sale of a life insurance policy by its owner to a third party. This results in the seller receiving a cash payment that is greater than the cash surrender value of the policy, but less than the death benefit.  The payment amount depends on a range of factors, including your age, health and the terms and conditions of your policy. On average, the insured receives a lump-sum cash payment that can often be 4 to 6 times greater than the cash surrender value in exchange for transferring ownership.  The buyer of the policy is then responsible for future premium payments, however they will receive the policy’s death benefit when the insured passes away.

  There are many reasons why someone decides to sell their life insurance policy. It could be due to an unexpected expense, medical costs, or simply relieving the burden of  expensive premium payments. Unfortunately, more than half of policyowners are unaware of the life settlement option and let their policy lapse. This sometimes results in the forfeit of tens of thousands of dollars. In 2018, 7.7 million policies, with a total face amount of $570 billion, lapsed. Ultimately, Life Settlement is a lucrative option to redeem the  value of your life insurance policy today without leaving money on the table.