life insurance settlement

When the insured and insurance company enter into an agreement, financial protection is contingent upon death of the insured. After the insured person dies, an appointed beneficiary will be the recipient of money from the insurance company. However, some circumstances may warrant that the life insurance payment to the beneficiary is no longer needed. After the insured person reaches an age over 65, they have the option to make a life insurance settlement. Using a settlement, another company will purchase the policy from the insured person, returning on at least part of the cash value to the insured person. Rather than remain bonded to an insurance contract that is of no use, the insured may be able to profit from the money they can get out of a settlement. Common situations where a settlement is useful includes the death of a beneficiary and large debt in the policy.

Fast Facts

A settlement is not the same as a payment

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