Life Settlement

A life settlement refers to the sale of a life insurance policy by the policyholder to a third party. Life settlements are a way that policyholders can access capital that would otherwise not be accessible. Say, for example, a retired person in their 70's has a life insurance policy with a $300,000 face value. There is a market made up of individuals and institutions that would be willing to purchase this policy for a portion of the face value. If the policy is sold, the policyholder would receive a lump sum payment that they would otherwise only have received upon their death. The new owner of the policy assumes ownership of the policy and responsibility for the premium payments. This new owner will then receive the $300,000 when the previous policyholder dies.

Barry Kaye and Associates Accused of Fraud in Life Settlements Case

The prominent insurance firm Barry Kaye and Associates is accused of fraud in a case involving life settlements. The suit against the Boca Raton Florida firm alleges breach of contract, unjust enrichment, negligence, fraud and violation of Ohio's securities laws. Source: Investment News Full Story
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J.G. Wentworth Files for Bankruptcy - Life Settlements Market in Flux

A major player in the life settlement market has filed for Chapter 11 bankruptcy protection. On Monday, J.G. Wentworth and two of its affiliates filed for bankruptcy protection in a Delaware court. J.G. Wentworth had been very active in the life settlement market. The financial crisis has deeply impacted all securitization markets, and the life insurance market is no different. Life insurance policyholders who have already sold their life or annuity policies and received funds should be fine...