Life Settlements - Selling Life Insurance Policies to Third Parties

Life Settlements are the sale of an existing life insurance policy by a policyowner for less than the face value of the policy to a third party investor. The funds generated are greater than the policy's cash surrender value. The purchaser pays all of the full future premiums.

The Third Party Investor(s) plan to profit at the death of the insured by collecting more in death benefits than paid out - the total of purchase price, transaction costs and premiums.

Many times the original planning and reasons for purchasing the policy have changed and the policy is no longer needed by the insured policyholder. In addition, premiums may have become a burden and the cash from the sale can be put to better use.

Other reasons for choosing a Life Settlement include:

           1). The intended beneficiary of the policy is deceased
       2). The policyholder owns multiple policies and desires to
              sell one
       3). The policyholder wants a new policy to better meet
              their needs
       4). The policyholder needs the funds to pay for medical
              expenses
       5). A "keyman" policy is no longer needed
       6). Having been given to a charity, the charity wants to
              liquidate for the cash

BenefitPlace highly recommends working with trained and experienced professionals when considering a Life Settlement. Many factors contribute to the amount the Policyholder will be paid by the Third Party Investor(s). In addition, the Policyholder should be clear on the reasons for obtaining a settlement and thoroughly understand the pros and cons. BenefitPlace suggests getting a Second Opinion before accepting a settlement offer.