A life settlement is the sale of a life insurance policy to a third party. The owner of a life insurance policy gets cash for the policy. Life settlements do not require that the insured have a catastrophic or life-threatening illness or condition.
People decide to sell their life insurance policies for many reasons.
Some common ones are the changed needs of dependents, a desire to reduce or eliminate premiums, and a need for additional cash to meet expenses. Virginia's regulation of insurance generally does not extend to life settlements. Certain aspects of these transactions may fall under the Virginia Securities Act. As such, there can be financial risks involved when entering into such arrangements. If you are considering selling your life insurance policy, know your options .