A life settlement, to summarize, is basically the sale of a life insurance policy at a price, higher than the cash surrender value. Many seniors are realizing the extraordinary benefits of unlocking the dormant asset value of life insurance, allowing them to better plan for their future through what is essentially newly-found money. Life insurance settlements are increasingly offering seniors viable options for their life insurance policies, and, as we are now seeing, more financial options can be rewarding indeed.

A life insurance settlement is the sale of a life insurance policy (whole life, term, universal life, etc.) covering the life of one or more individuals with an ascertainable and limited life expectancy. A life insurance settlement is usually most beneficial seniors over the age of 65.

Some basic qualifications for a life insurance settlement are the above-mentioned age and health requirement, policy is assignable and beyond the contestability period, and the policy must be issued by a US insurance company. The higher the insurance company rating could provide a higher settlement amount.

The policy owner is paid a lump sum in cash in exchange for transferring ownership of the policy and premium requirements to the purchasing funder or company. The amount paid to the seller is stated as a percentage of the policys face amount and is calculated based on the specific life expectancy of the underlying insured. Each life insurance settlement amount is calculated on a case-by-case basis.
The popularity of life insurance settlements is due to the fact that if a policy owner was thinking about letting a policy lapse or surrender, they now have the opportunity to receive a payout larger than the surrender value. It just doesnt make sense, that seniors nationwide are letting life insurance policies lapse after paying years of premiums. By just exploring the option of a life insurance settlement they could be gaining thousands to hundreds of thousands of dollars they never knew were available to them. Another benefit is that there are no fees or obligations to have a policy evaluated to see if a life insurance settlement is available.