Everyone knows that life insurance is a contractual agreement between a person and their insurance provider whereby the individual pays a monthly premium until the individual dies. At that time the amount of the policy is paid out to the individual's beneficiaries for financial support.
Every parent knows how important life insurance is to the ones who depend on them for financial stability. As you grow older and into your senior years, your beneficiaries may be grown and not necessarily need this benefit when you pass.
Individuals who struggle in their later years with financial and medical issues have a potential option of selling their life insurance policy as a way to help. These transactions are known as life settlements and can be a real financial lifesaver for senior citizens who are barely getting by. As boomers grow into their senior years, they may be approached by individuals who prey on unsuspecting seniors into selling their life insurance as a way to generate cash.
Companies who invest in life settlements will generally pay a hefty discount on the benefit amount in exchange for waiting until you pass before collecting on the insurance benefit you originally agreed upon with your provider.
In summary, individuals who approach unsuspecting seniors may get a hefty commission or referral fee on the transaction and may not be acting in the best interests of the policy holder. Therefore it is prudent to be wary of any individual or company offering to purchase your life insurance policy for an upfront cash payment.