Until recently, the only options for liquidating an underperforming, unneeded, or unwanted policy was to let it lapse, reduce the face amount, sell it back to the original insurer for its current net cash surrender value, or exercise one of the non-forfeiture options available through the life insurance contract. But thanks to an increasingly competitive secondary market, known as life settlements, life insurance is no longer regarded as simply a death benefit.

Like other types of personal holdings, life insurance has evolved to become an asset with a fair market value that may be higher than its net cash surrender value.

This sale of an insured’s existing life insurance policy to a third party in exchange for a lump sum cash payment is called a life settlement. In a life settlement, the sale price is less than the policy’s face amount, but is higher than the policy’s net cash surrender value. Upon selling one’s insurance policy, the policy owner is relieved from making future premium payments.

Insureds who are chronically or terminally ill (viatical settlement) may be eligible for an accelerated death benefit.

Terminal illness is generally defined as a person having a life expectancy of 24 months or less (in certain states, 36 months or less).

Invescor, Ltd. chooses not to participate in the viatical settlement marketplace.