U.S. Life Settlements are life insurance policies that have been sold through the regulated secondary market; the rights of ownership of life insurance policies are transferred to the purchaser for a fixed cash value. The insured seller of the policy has no responsibility for the maintenance of future premium payments. Investors in Life Fund benefit from the difference between face value (insured benefit/sum) less the maintenance to keep the policy in force and the cost of acquisition.
The sale of a life insurance policy within the life settlement market is preferential to lapse or surrender. The insured with advice from their financial adviser will receive a greater value by selling their life insurance policy in the secondary market rather than allowing it to lapse or surrendering it to the life office, accessing additional funds as part of their wealth management strategy.