Meet Diana.

Diana, 78, has just recently had a stroke. Her family is worried because her savings can no longer fund her health care costs.

Many Americans share similar situations with Diana and simply cash surrender or allow their insurance policies to lapse. This is because they think of their life insurance policies as a liability or just another monthly bill rather than an asset. Diana could easily life settle because of lingering health conditions.

The calculation for the settlement amount is as complex, if not more, than the calculations for the cash surrender value, but the secondary market gives Diane a market that did not exist in the past. In prior years, the she was left with only one entity to deal with, her own carrier. This exciting alternative allows the her to obtain institutional, and real market pricing for this valued asset. On average, the life settlement sum paid out is normally at least two to four times as much as the cash surrender value of her policy.

Because of Diana's medical condition and her age, her insurance policy's market value has just skyrocketed. If she bought a $500,000 policy, she may be able to sell her policy for as much as $350,000. Compared with a cash surrender value stays relatives static at around $120,000.