Life Insurance Settlements

Life Insurance Settlements is the sale, assignment, transfer of ownership of a life insurance policy to a third party

Life insurance settlements or viatical settlement is the sale of a life insurance policy by the policy owner before the policy matures.

When such a sale is conducted, the price will be less than the face amount of the policy but usually more than premiums paid or more than current cash surrender value. The sale creates immediate cash settlement.

Generally, viatical settlements involve insured individuals with a life expectancy of less than two years.

In United States, without state-subsidized health care and high health care costs, this is practical, because of the high health insurance premiums that severely sick people have to face. This industry grew in popularity in the States in the 80s

When you have a policy holder with terminal illness, or if you are caring for some love ones who is terminally ill. The thought of time and money (expensive health care and care giver's costs) will make you think of the life insurance policy, and what it's cash value will do. This will be a situation for life settlements.

Viatical settlement is similar to buying a bond with a negative coupon and an uncertain redemption date. The return depends on the seller's life expectancy and when he or she dies.

Life insurance settlements, which are similar settlements but involve insureds with longer life expectancies (two to fifteen years).