A Life Settlement is the sale of an existing life insurance policy to a settlement
provider or funding company. The provider determines a dollar value of the
existing policy and the policy owner receives a check. Of course the next
questions are :
Why would a policy be sold? Who qualifies? What type of policy qualifies?
There are many reasons for selling a policy :
Raise money for medical expenses, charitable contributions, the policy is no longer
needed, the policy will lapse without benefit to the owner.
Next, what type of policy qualifies for a Life Settlement?
Almost any type of policy will qualify - Term, Ordinary, Whole Life, Group, Key
Man, etc. The policy should have a face value of $250,000.
Finally, who Qualifies?
When assessing a case the provider reviews the age of the policy owner (65 plus
is best) and health conditions. These factors determine the amount a funding
company may offer. Of course each case is reviewed on an individual basis. There
are no strict regulations or guidelines.