The association sets the standards for the viatical and senior settlement industry and operates on behalf of its members and the individuals they serve. A senior settlement is the sale of an existing life insurance policy by its owner to a third party. The owner receives a cash settlement in exchange for transferring ownership and all other rights of the policy to that third party. Unlike a viatical settlement, the insured person under a senior settlement is not terminally ill but is age 70 or older whose health has changed since the policy was issued. A senior settlement is not about immediate cash needs, but about financial planning and future needs.
Individuals are able to retire with significantly more dollars.
Senior managers terminated from companies were able to obtain significant dollars in terms of severance from the sale of key-man policies. Many individuals and estates are able to purchase cost-efficient insurance with the proceeds from a senior settlement. Senior settlements provide significant value to policy owners who take advantage of them. Financial advisors have a fiduciary responsibility to bring senior settlement options to clients especially if their client is thinking of surrendering or lapsing a policy or if a policy is poorly performing. An opportunity may be available to improve a client's financial situation.