Traditionally, life settlements – the sale of an unwanted or unaffordable life insurance policy for substantially more than the policy’s cash surrender value — have significantly benefitted seniors by providing them with resources to help pay for rising health care costs, medical bills and other needs in retirement.
(Related: Where the Life Settlement Business Is Now — And Where It’s Going)
For a policy to have value in a life settlement, the insured person under the policy typically needed to be in their mid-to-late 70s and have had a decline in health since the policy was first issued. Health impairments such as diabetes, heart disease, cancer or other serious medical conditions were often necessary in order for the policy to be sold.
But now, even healthy seniors – those whose health has not significantly declined from when they first took out the policy – have the option to