What is a life settlement?

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A life settlement is when a third party buys your permanent life insurance policy for a set amount. You might wish to do this if you no longer need the policy or you want to buy a different policy.

A life settlement will usually net you more cash than if you surrender the policy to the insurance company. Insurers look down on the practice, but because life insurance is considered private property, you can sell it to whomever you choose.