Life Settlement

A financial transaction that occurs when the owner of an insurance policy chooses to sell an unnecessary policy, to a 3rd party or life settlement company,  for more than the cash value of the policy, but less than the actual face value.  Life settlements are usually done on the policy of a senior citizen or on policies where the insured has a shortened life expectancy.  When the death of the insured occurs, the benefit is paid to either the 3rd party or the life settlement company.