top of page

Understanding Life Settlements: Increase Life Insurance policy value.

A happy couple who sold their life insurance with Life settlement connect.
Happy client of life settlement connect

What are life settlements and how do they work?

Life settlements work by assessing the value of a life insurance policy based on various factors such as the insured's age, health condition, policy type, and death benefit amount.

The buyer will evaluate the policy and determines its market value. If the policy meets certain criteria, such as being a term, whole, or universal life insurance policy with a minimum face value, it can be eligible for a life settlement. T

he policy seller then enters into a contract with a regulated buyer and agrees to sell the policy for a negotiated amount.

Life settlements are financial transactions where a policyholder sells their life insurance policy to a third party for a lump sum cash payment. This option is available to individuals who no longer need, want or can afford their life insurance coverage. The third-party regulated buyer becomes the new owner of the policy, and assumes responsibility for paying the premiums and collecting the death benefit when the insured passes away. In return, the policyholder receives a cash payout that is typically higher than the surrender value of the policy.

Once the contract is signed, the new owner takes over the responsibility of paying the premiums and becomes the beneficiary of the policy. The policy seller receives a lump sum payment, which can be used for various purposes such as medical expenses, retirement funds, or other financial needs. The buyer continues to pay the premiums until the insured passes away, at which point they collect the death benefit from the insurance company. It's important to note that the life settlement buyer assumes the risk of the insured living longer than expected, as they may end up paying more in premiums than the death benefit received.

Life settlements can be a viable option for policy sellers who no longer need or can afford their life insurance coverage. They provide an opportunity to unlock the value of the policy and receive a substantial cash payout. However, it's crucial to carefully consider all financial implications and potential tax consequences before entering into a life settlement.

A visit to will provide the guidance and support a policy seller will need.

25 views0 comments


bottom of page