A Life Settlement, or the sale of a life insurance policy, is gaining popularity as a new opportunity for seniors to generate cash. By "cashing in" a life insurance policy, one can reap the rewards of an immediate cash payout without lapsing or surrendering the policy to the insurance company.

Faced with rising insurance premiums, increasing cost of healthcare and long-term care, more seniors today are choosing to sell their life insurance policies to third parties for a lump sum payment. Rather than let their policy lapse, seniors have the option of cashing out early and enjoying a higher quality of life.

Seniors can use the cash they receive from the sale to help pay for medical expenses, long-term care expenses, or everyday living expenses. Additionally, seniors are using the "unlocked" cash to travel, invest in a business or new property, or support their children and grandchildren. There are no restrictions or limits to how the cash may be used once the policy is sold.

How does it work?
Seniors who are over 70 and own a life insurance policy worth over $200,000 can sell their policy to a life insurance buyer, otherwise known as life insurance broker or life settlement brokers.

By purchasing the whole, term, or universal life insurance policy, the buyer becomes the new policy owner. This means that the buyer takes over the premium payments and ultimately collects the full amount of the death benefit.

Who benefits?
As the policy holder, seniors may enjoy a higher cash payout upfront and the savings when the buyer takes over the ongoing insurance premium payments.

What's the catch?
There is no catch. Life insurance settlements are legal and legitimate. Life insurance buyers are able to offer a cash payout because of the structure of their businesses and the financial market.

What should I know before considering a settlement?
The ideal time to sell a life insurance policy, otherwise known as taking a life settlement, is when:

1. The policy holder is over age 70

2. The policy is worth $200,000 or more

3. The policy holder is chronically ill, and/or their health is declining

4. Additional cash is needed to pay for cost of health care of long-term care

5. Policy holder is experiencing financial difficulties or needs additional funds to improve the quality of life

6. There is difficulty paying the life insurance premiums and are at risk of lapsing the insurance policy

7. The senior would like to remain financially independent

How much money can I expect to receive?

The lump sum payment will be determined on a case-by-case basis. It depends on a number of factors, including age and medical condition, the type and value of the policy and the premiums required to keep the policy active. A no-obligation appraisal of your policy can be requested before making the decision to sell it.

Any policy owner, including individuals, corporations, charities or trusts, may sell any life insurance policy, including group and term policies.

What types of life insurance policies can be sold?
Universal Life, Whole Life, Variable Universal Life, Term, and Convertible Term Life policies, Joint and second-to-die policies are all policies eligible for sale.

How long does it take to get the funds once my policy is sold?
A general time frame is four to eight weeks to receive funds though the timing can vary. The buyers work to complete the process as quickly and efficiently as possible so that the money can be released to our clients as fast as possible.

Will I owe taxes on the money I receive?
Generally, the money received from selling the life insurance policy will be tax-free up to the original policy's tax-basis. Consult with a tax advisor regarding your specific situation.

How do I find a buyer for my policy?
Experts at are committed to achieving the highest value for their client's life insurance policies. Serving their clients with integrity and respect, Life Insurance Buyer offers free, no obligation, confidential policy appraisals for all qualified individuals. Contact Life Insurance Buyer at 1-800-LI-BUYER or
1-800-542-8937 to discuss your policy.