Life Settlement is an option which allows for policy owners to tap previously unrealized value in their unwanted, unaffordable, or underperforming Life Insurance policies. A Life Insurance policy is an asset just like a house or a car.  It can be sold just like a house or a car.

A Life Settlement is the sale of an existing in-force life insurance policy, on an insured whose 65 or older, and whose life expectancy is greater than 2 years (not terminally ill), to a third party for an amount greater than the cash surrender value.

• The policy owner receives cash for the policy
• The new owner becomes responsible for all future premium payments
• The new owner becomes the beneficiary of the policy

At the death of the insured, the death benefit is paid to the new owner.

Life Settlement works similar to a Real Estate transaction where a buyer and seller come together, negotiate terms, and transfer ownership of property.  So, how does Life Settlement work:  you list your policy, you receive offers, you accept the offer you like, you get paid once closing is complete.  There’s no cost to the seller.

A Life Insurance policy can be liquidated for fair market value and the proceeds redistributed to address current financial planning goals such as retirement income, long term care, annuity, vacation or anyway you please.  There are not restriction on how the proceeds from a Life Settlement can be used.

The proceeds may be taxable.  A tax advisor or attorney should be consult on taxable issues.