What Are Life Insurance Settlements? 
Life insurance settlements are the sale of life insurance polices by the owners of the policies , to third party buyers , in exchange for cash . The amount paid to those selling their policies is higher than they would have received by cashing their policies in , but less than would have gone to their beneficiaries , had they passed . Life settlements became popular when AIDS was claiming many victims , and some policy holders decided that they would rather spend their life insurance money while they were alive . In fact , life settlements usually are not offered unless the insured person on the policy appears to not have many years left to live , or else the policy is not worth purchasing by the buyers . 