A life settlement is the sale of a life insurance policy by a policyholder who is not terminally ill to a third party for a lump sum that is more than the cash surrender value but less than the death benefit. Life settlements are available to policyholders who no longer need or can afford their coverage.
Key Points
- Life settlement: sale of life insurance policy by non-terminally ill policyholder
- Proceeds: more than cash surrender value but less than death benefit
- Available to policyholders who no longer need or can afford coverage
- Buyer pays premiums and receives death benefit
- An independent agent can help you evaluate life settlement options