A Life Insurance Settlement is a complex financial transaction and the life insurance settlement process is where investors buy an existing in force life insurance policy, and thereby the right to collect the death benefit when the insured dies. Investors pay the purchase price to the original policy owners and then assume responsibility for all of the ongoing policy premiums. There are many steps in the life insurance settlement process but in essence it is simply the sale of personal property to a buyer.

The investors who drive the life insurance settlement market are major Wall Street institutions like Goldman, Sachs or Merryl Lynch. They buy large numbers of individual policies as they provide an excellent and very safe rate of return. They buy policies of all sizes from $50,000 in face coverage, all the way up to policies with tens of millions in face amount. The amount received by a senior for selling a life policy in a life settlement range from just a few percent of the face amount up to over 40% of the face amount.

Over the last few years a very large investment market in life insurance settlements has emerged. Owning life insurance is actually a form of investment, and the return on that investment is the death benefit paid to the policy's beneficiaries. Historically a life insurance policy is one of the most reliable investments available anywhere, because the death benefit is guaranteed by the full faith and credit of very highly rated institutions with many billions in assets.

The emergence of the life insurance settlement market is without doubt one of the most exciting and fundamental changes to the life insurance industry in over 150 years. The life settlement financial transaction is truly a win-win for both the policy owners that sell the policy, and for the investors that buy them. The win-win nature of the life settlement financial transaction is a primary reason for the markets explosive growth. The possibility of re-selling life insurance in life insurance settlements has completely transformed how seniors view buying, owning life insurance policies.