What are common reasons for which people enter into a life settlement?

The major reasons for settling a policy fall within the following categories:

• Changes in life circumstances
• New financial needs
• Inadequate policy performance
• Changes in financial or estate planning.

What are some changes in life circumstances that could make a life settlement a good idea?

According to surveys, almost 80 percent of life insurance is bought primarily for income protection. If your beneficiary no longer depends on your income, the life policy may be unneeded. One of the most common reasons that a life insurance policy may not serve your needs is that you have outlived your beneficiary. Another common change in life circumstances is that your beneficiary has achieved financial independence and no longer needs the protection of life insurance.

If no one needs protection in the event of your death, a life insurance policy may not be a good choice. If you would rather have cash than a death benefit, you should consider a life settlement.