Even though secondary the market has existed for over 20 years, it is humbling to learn that there are so many people out there who aren’t aware of this exceptional option to sell a life insurance policy.

A life settlement is the sale of a person’s life insurance policy to a third-party investor. In a life settlement, the policy’s owner transfers the ownership of that policy in exchange for an immediate cash payment from the buyer.

The third party buyer takes over the premium payments and receives the death benefit after the insured passes. In most cases, a senior who owns a policy that they no longer need or want will decide to sell it for a payout that is greater than the cash value.

A life settlement can easily become an optimal option for seniors who cannot afford to maintain their insurance policies, but wish to receive the best financial outcome from it. Advisors often overlook this as a possible source of income for financially troubled seniors, or for seniors whose policy’s original purpose is no longer relevant.

Life settlements give the policyholder the option to sell the policy while also ridding themselves the burden of maintaining it. In many cases, seniors choose this option in order to enhance their standard of living, or put the money into more relevant investments.