A Life Insurance Policy Settlement allows you to sell your life insurance policy to a third party for a lump-sum payment, which is typically more than the cash surrender value but less than the death benefit. Once sold, the investor becomes responsible for the premium payments and receives the death benefit when you pass away.

This option is beneficial for policyholders who no longer need coverage or want to eliminate ongoing premium costs.

The settlement amount is based on factors like the policy’s value, your health, and life expectancy. It’s a practical solution for seniors looking to access funds for immediate financial needs.

As part of the life insurance settlement process, the insured’s medical records are typically reviewed to assess life expectancy. The shorter the life expectancy, the higher the settlement offer might be, as the buyer will likely receive the death benefit sooner.

The settlement process usually involves several entities, including brokers, settlement providers, and sometimes financial advisors, who help determine the value of the policy and connect the seller with potential buyers. These intermediaries play a role in negotiating and finalizing the settlement offer.