What is a Life Settlement?A life settlement is the trading of an already purchased life insurance policy to a alternative party for more than its cash surrender value, but less than its net death benefit. There are a number of factors that a policy holder may choose to sell their life insurance coverage.
The policy owner may no longer want or need his or her policy, he or she may wish to purchase a different kind of life insurance plan, or insurance premium payments may no longer be affordable. Insurance police owners frequently read about settling, or selling, their insurance plans using a financial consultant or advisor, broker, law firm, friends, or even the internet.
What's the Point?To be honest, I didn't know much about them either. But, leaving all identifiable information out, I was recently forced to become informed on the subject. To be even more honest, I can see why people seek to utilize something like this. The profit can pay for, in the case I am referring to, extended care but it can also go towards whatever the policy holder would like.
I wrote a Squidoo on the subject that further explains what and why life settlements can be looked into. Check it out, leave a comment.