What is a Life Settlement?
A life settlement is the process of selling your existing life insurance policy to a licensed life settlement provider.
The concept that life insurance is an asset that the policyowner can choose to sell dates back to the early 20th century, when the U.S. Supreme Court ruled that a life insurance policy was private property.
Like any financial decision, choosing to sell your insurance policy requires you to weigh all of your life insurance settlement options in order to understand when selling makes sense.
A Life Settlement Is All About Not Settling.SM
A life settlement is all about options. Before Coventry created the secondary market for life insurance, policyowners who no longer needed their policy would either surrender their policy for its cash value, or allow it to lapse and receive nothing.
Life settlements allow policyowners to get more money for their unwanted policy than they would get from surrendering their policy to the insurance company – on average, more than four times the cash surrender value.