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A life settlement lets you sell your life insurance policy to someone else for cash right now. Think of it this way: instead of canceling your policy and getting back very little money (or sometimes nothing at all), you can actually sell it and receive a lump sum payment. You’ll get more than what the insurance company would give you if you surrendered it, though it will be less than what your beneficiaries would receive if you kept the policy until you passed away. Once you sell, the new owner takes over paying the monthly premiums and becomes the person who will collect the money when the time comes.

Most people who qualify for a life settlement are 65 or older and have a life insurance policy worth at least $100,000. But age isn’t everything – if you’re younger than 65 and your health has changed significantly since you first got your policy, you might still be eligible. The key is that your health situation has shifted in a way that makes your policy more valuable to potential buyers.

How much you’ll get from a life settlement really depends on your specific situation. Things like your age, current health, what type of policy you have, how much the premiums cost, and the size of your death benefit all play a role in determining the final amount. Every case is different, but most people can expect to receive somewhere around 30% of what their policy is worth on paper. Some get more, some get less – it all comes down to those individual factors we mentioned.

You can sell quite a few different types of life insurance policies through a life settlement. Universal life, whole life, and term policies that can be converted to permanent coverage are all good candidates. If you have a regular term policy that can’t be converted, it’s usually harder to sell unless your health has changed dramatically since you got it.

Every type of policy has its own quirks when it comes to whether it qualifies or not. 

Absolutely. A lot of people use the money from selling their life insurance policy to pay for healthcare costs, long-term care, or medical bills that have been piling up. But here’s the thing – once you get that cash, it’s yours to use however you want. Some folks put it toward their health expenses, others invest it or finally take that trip they’ve been dreaming about. We’ve seen people use it for home renovations, to help out their kids or grandchildren, or just to have some financial breathing room. There are no restrictions on how you spend the money – it’s completely up to you.