A life insurance settlement can be defined in a few different ways, but normally it is simply the sum of money that one’s heirs receive after a policyholder passes away. After you responsibly pay your monthly premiums and/or maintain the cash value amount associated with your life insurance policy, your loved ones are entitled to this so-called death benefit payout, or insurance settlement. Then, whether these often-substantial funds are used to pay off your family’s home mortgage, other debt hanging over their heads, or simply provide the funds necessary for your burial expenses, you can imagine that in the time of their greatest grief a settlement means that they will have fewer financial worries. It will be a supreme gift that you can give them while you’re still alive.

Another type of life insurance settlements exist as a way for policyholders to sell a life insurance policy that they possess to an institutional funder of one sort or another-a third-party who agrees to buy the policy for more than its cash surrender value. Life settlements of this kind are basically a way for a policy holder to terminate a policy early for any number of reasons, but often centering around the cost of maintaining the policy. Often policyholders needs change as they get older. If their assets depreciate by a large enough amount it no longer makes sense to pay policy premiums to maintain the level of coverage that was appropriate decades earlier. Also, as incomes decline in our later years we may be unwilling or unable to to pay premiums that might very well be increasing as we reach our 70s and 80s.

In these cases, it might behoove a policy holder to find an expert in life settlements to help them negotiate with institutional funders in an effort to get a good price for the policy in question. In the best case scenario it might be possible to put the money into a new policy or policies more appropriate to policyholder’s current situation. If done correctly there can be a significant amount of cash left over after the transaction.

Regardless of which type of insurance settlement questions brought you to this article, seeking out professional help is a very good idea, as always. But one things for sure. As you enter your 70s or your 80s your needs do change, and if your situation is complicated or if you have a high net worth it’s probably a good idea to at least get a free consultation with a life insurance professional to reassess your needs.