Final Expense Life Insurance Quoter

Life Settlements

Disclaimer: This information is not an offer to sell any security or interests in Life Settlements. An offer to sell interests in Life Settlements from West Coast Settlements can be made only by a private placement memorandum. 

What Are Life Settlements?


Just like a real estate deed or a mortgage contract are assets that can be sold, life insurance contracts are also salable assets. gives this basic definition of life settlements:

In a “life settlement” transaction, a life insurance policy owner sells his or her policy to an investor in exchange for a lump sum payment. The amount of the payment from the investor to the policy owner is generally less than the death benefit on the policy, but more than its cash surrender value.

The investor (which may be an individual, a private equity fund, or an institution) then maintains the policy, pays any additional policy costs or premiums, and collects the death benefit when the insured passes.

Who Can Invest In Life Settlements?

 California residents need to only have a net worth of $250,000 over and above their home, furnishings and automobile. These qualified California residents cannot invest any more than 10% of their net worth. If the California resident has a net worth of $1,000,000 or higher there are no restrictions on investing in life settlements. 

The availability of certain life settlement investments also varies state-to-state. As of this writing, direct fractional life settlements are not available in most states. (You can contact us to see if they are available in your state.)

Why would someone want to sell their life insurance policy?

There are many reasons that someone may no longer need or want their life insurance policy. Some common reasons:

A spouse may have passed, and other children/heirs are self-sufficient

 The insured may have divorced or have no heirs they wish to leave assets to

Funds may be needed to pay for long-term care or healthcare costs

Changes in estate or tax law may cause an individual to consider lapse or surrender of a policy

The policy owner has fallen behind in payments or wishes to halt remaining premium payments

A desire for cash arises, whether to purchase a retirement home or fund a grandchild’s college tuition.

For whatever reason, the current policy owner decides they would rather have a cash windfall than the insurance policy. They wish to trade their death benefit for a living benefit that they can use in their remaining years.

What are the advantages Life Settlements for investors? 

Attractive rates of return: When we say, “a good investment is one that generates double digit interest rates with no loss of principle,” we’re thinking about life settlements. While past returns are not indicative of future returns and there are always risks in investing, we have seen life settlement funds produce gains consistently, ranging from mid-single digit annualized returns to low double digits.

Safety and Stability: Returns are not tied to the performance of the stock market, housing market, interest rates, politics or any other external factor. The underlying policies are typically highly rated life insurance companies, known for stability.

A true “win-win” investment: Seniors that no longer want or need their permanent insurance policies can always surrender them in exchange for the cash value, but if they can sell the policy for more, they benefit. Seniors often receive as much as four times their cash surrender value. Investors and the seniors who sell their policies both benefits. 

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