How did the life settlement industry evolve?

Some seniors choose to cash in their life insurance policies to compensate for living expenses or recreation. Perhaps their benefactor(s) have passed away or are grown and financially secure. In many cases, the policies have been purchased to pay estate taxes or other expenses and they are no longer needed. In the past, the only way individuals could cash out their policies was through the life insurance companies. In doing so, they would only receive their surrender value less any possible fees.

The life settlement industry began with the recognition of senior citizens’ need to be able to competitively sell these policies, as opposed to being forced to accept the low surrender value payout from the life insurance companies. Within the life settlement industry, seniors express a desire to sell their policies and various settlement companies bid to purchase the policies. In this way, seniors receive higher payouts on their policies as opposed to selling them directly back to their life insurance companies. Since the inception of the life settlement industry about 15 years ago, it has grown into a multibillion-dollar industry, helping individuals receive fair settlements on their life insurance policy buyouts.