A life settlement is when someone sells their life insurance policy to get money while they are still alive. The buyer takes over paying the premiums and will receive the full benefits when the original policyholder passes away. Full definition
In addition, most states require that consumers are provided with information about alternatives to settlements, risks related to taxation and government assistance, and the licensing of life settlement brokers and providers. (lisa.org)
Thus, while there are a number of valid concerns, in practice the evolution of professional life settlements companies have helped to mitigate or minimize most of the issues. (kitces.com)
State regulations require that all policies are sold through a licensed life settlement provider. (lisa.org)