A life settlement is the process of selling a life insurance policy for a sum greater than the cash surrender value but less than the face value. It allows an insurance policy owner to convert a nonperforming, illiquid asset into immediate cash or another financial product that is more suitable for your present stage of life.
Like any other asset, life insurance is only worth paying for if it is valuable to you. Life insurance premiums can be expensive, especially if you no longer need the coverage. By selling your policy, you can extract value from it instead of simply abandoning it. A life settlement offers a way to eliminate those high monthly premiums and still make the most of your assets.
Life insurance policy owners can turn an unwanted, unaffordable, or obsolete insurance policy into significant financial opportunities. With the life settlement process, you can liquidate an otherwise dormant asset instead of just letting your policy lapse, canceling it, or surrendering it to the carrier for the cash surrender value.