Meet John, Age 65 with a $1 million policy.

He first purchased the policy for his kids in the case of an unforeseen death; but now, his children have children of their own and are doing well financially. His financial landscape, as well as his priorities, have all changed dramatically and he heard about life settlements at LiveSettlements.net.

As a life insurance policy owner, John may want to consider life settlements--the act of selling his unwanted or unneeded life insurance policy on a secondary market for more than the cash value offered by his life insurance company if he were to surrender that policy. Life settlements, or senior settlements, present an alternative for policy holders who cannot or do not wish to continue paying their insurance premiums.

Life Settlement Providers (LSPs) who bid on and then purchase the policy will become the new beneficiaries and be responsible for all subsequent premium payments. Depending on certain qualifications, John may receive between 2-4x the current cash surrender value of his policy upfront. By participating in a life settlement, John could take the cash sum and accomplish many life goals: paying back personal loans, mortgages, mounting medical bills, or a vacation for his family.

Life settlements are regulated in many states while the SEC is considering regulating life insurance as an investment. Life settlements were legalized by the Supreme Court case of Grisby v. Russell (1911), which established a policyowner's right to transfer an insurance policy.

There are many reasons why one might consider life settlements. However, John should explore other options and his potential eligibility before deciding on a life settlement. These may include:

• Borrowing against your policy
• Accelerated death benefits
• Selling a portion of the policy
• 1035 exchanges
  

Although there are other options, Life Settlements still provide the best solution for many cases.