In short, a life settlement is the sale of an existing life insurance policy for more than the policy’s cash value but less than the death benefit.

Life insurance provides financial solutions to meet various needs of businesses and families. Over time, however, needs change. Policies may fail to meet the needs of changing circumstances or may no longer be needed.

A life settlement offers policyowners an opportunity to sell their policy for significantly more than the cash value offered by the insurance carrier.

The purchaser assumes ongoing premium payments and receives the death benefit upon the death of the insured. In most cases, we can tailor a solution for the policyowner, where they can choose to retain a portion of the policy’s death benefit in lieu of, or in addition to, a cash payment. As a broker, we can get the best offer for the policyowner by shopping multiple settlement providers.

It is estimated that more than $700 billion of life insurance is surrendered or permitted to lapse each year – over $100 billion of which is by seniors. Further, nearly 90% of all Universal Life policies never result in a death claim.

A surrender essentially is a sale of the policy back to the insurance company for the cash value. Life settlements benefit policyowners by offering an alternative option.

On average, life settlements provide more than four times the policy’s cash surrender value in addition to decreased monthly expenditures for policy premiums.