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Article: Money for your life (insurance): selling a policy for cash is not as unusual as you might think.
- Article from:
- State Legislatures
- Article date:
- January 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 National Conference of State Legislatures. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Sally, who suffers from breast cancer, decided to sell her life insurance policy to investors to pay for her growing medical expenses. She got $250,000 for it, which she used to buy medicine. The investors will receive her $500,000 death benefit when she dies.
Many people might be surprised to learn that a life insurance policy is an asset that can be sold. But such transactions can be arranged through a broker who works on behalf of the policyholder and solicits multiple bids, or a provider that represents a single firm interested in purchasing the policy. The investors are typically hedge funds and financial institutions.