Policyowners who are considering the surrender or lapse of a policy will be pleased to know there is a third option that is more profitable. It’s called a life settlement and is based on the secondary market for life insurance policies, which has created a viable market opportunity for policyowners who meet certain parameters.

Despite its simplicity, the life settlement process may ultimately provide policyowners with 2-4 times the cash surrender value of the policy. Considering that until recently the only options policyowners had were to surrender the policy to the life insurance carrier or allow it to lapse, it’s not surprising that a thriving market for these policies now exists.

Perhaps the policy premiums have become too expensive, or the policy is no longer needed, going to be replaced, or there is a need for cash now. Regardless of what the motivator is, a life settlement is a powerful alternative to surrendering a policy or allowing it to lapse. Policyowners owe it to themselves to explore the life settlement option and to see if their current situation falls under the general settlement parameters.

A life settlement can provide the best solution for policyowners in an array of situations. Some of the more common reasons are grouped by the different types of policyowners linked to this page.

Generally, eligible candidates for a life settlement own a policy with a face amount of at least $100,000 that is past the two-year contestability period, insuring an individual 65 or older who has experienced a change in health since the policy was put in force.

Brookwood Settlement’s role is much like a real estate broker, and our professionals do all of the support work and provide the highest and best price for our clients. Unlike a real estate broker, however, our broker commission is paid by the buyer, not the seller. There is absolutely no cost to the policyowner or insured to complete a life settlement transaction.

We recommend that policyowners consult a professional advisor.