Life insurance settlements
Life Insurance Settlements allow a life insurance policy owner to sell an existing policy to a financial institution in exchange for an immediate lump sum cash settlement. The amount paid for the policy is a discounted percentage of the policy's net death benefit and represents the present day value of the policy. This purchase price is determined by considering the insured's estimated mortality (life expectancy) and the associated cost of premiums to keep the policy in force for that time frame.
Life Settlements create immediate liquidity from a non-performing asset, allowing policy owners to cash out of unwanted, unaffordable or obsolete life insurance policies
Today, with the advancement of Life Settlements as a mainstream financial product, Life Insurance Companies now face competition for the surrendered policies that they once monopolized. The Life Settlement Industry has created a competitive secondary market for life insurance policies. Consumers are now in the driver's seat, free to sell their policies in an open market for the highest available price, well above the cash surrender value offered by insurance companies.