What is a life settlement?
Another type of transaction, often called a �life settlement,� is the sale of a life insurance policy to a third party, where the insured individual does NOT have a known life-threatening or terminal illness or condition. In these cases the policy owner also receives cash for the policy.
There has been a growing market for the purchase and sale of policies that do not meet the traditional definition of a viatical settlement. Typically these transactions involve life insurance policies of a large face amount (often $250,000 or more), or involve �key-person� coverage or corporate owned life insurance or policies representing excess coverage that is no longer needed. These transactions are generally not regulated by most states� viatical laws, therefore the limited licensing and disclosure requirements of viatical transactions would not apply.
Found this definition on FreeAdvice.com
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