The market for life settlements—the sometimes-controversial pre-death life insurance cash-out—may be coming back from the dead.
The buying and selling of life insurance policies is not for the sentimental. It also has its uses. Senior citizens may have life insurance policies they don’t want anymore, and research (PDF) from London Business School suggests that seniors receive four times more by selling to an investor (either directly or through a broker) than they do from selling their policies back to insurance companies. If they let the policy lapse, they get nothing at all. (Insurance companies make up a large share of settlement buyers: Owning other companies’ policies is seen as a good hedge against their own outstanding contracts.)