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Life settlements involve the sale of either a senior’s existing life insurance policy, or a newly purchased one, to corporate investors. As the new beneficiaries, the investors make potentially large profits, particularly when the senior dies sooner than expected. The senior can profit as well, from fees paid to them upon sale to the investor (average $15,000.). The amount of these fees depends upon the senior’s age, health, and income, and although the fees are taxed as income, there are no out-of-pocket or up-front costs to the senior, who no longer pays the policy’s monthly premiums. Sounds like a win-win situation, but not necessarily.

This entry was posted on Wednesday, December 24th, 2008 at 3:33 pm and is filed under life settlement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.