Senior Life Settlements has acquired a remarkable importance over the past decade.  The industry focuses all its effort on senior citizens who have unwanted or unneeded life insurance policies.

Most people have the mistaken belief that unless they possess a whole or universal life insurance policy, their policy has no value until the insured dies. Whole and Universal life policies represent less than 20 percent of coverage currently in force and that number is diminishing. The vast majority of coverage currently in force is term life insurance.  If the insured dies during the course of the term, the carrier pays the face value of the claim.

According to the Insurance Information Institute, almost 80 percent of all term policies simply lapse.  This means that the insured stops making policy premium payments or allows the policy to reach expiry upon the completion of a term of coverage without renewing.  This happens generally because the original need for the life coverage (protection of family, business, etc) is no longer applicable and there is the (mistaken) perception that their policy has no other value. Premiums increase with age, and therefore many people simply decide to not incur the expense.

Life settlements has developed as a means for policyholders to sell this asset to a third party for cash or other consideration.  The business is now a multi-billion dollar industry that provides a way for seniors to take a non performing asset and turn it into something that can be used for their own benefit while still living.