Secondary market sellers include all of the above as all can benefit from a life insurance settlement if after review it is determined the life insurance is no longer needed. Reasons for selling may include unaffordable premiums; changes in the federal estate tax, retirement, if business insurance it may no longer be needed to fund a key man or a trust may find that the policy is not performing as projected. The policy owner may want their favorite charity to have the use of the funds now rather then at death of the insured/donor. Selling to financial institutions in the secondary market can be done for a variety of reasons. Whether it has to do with premium affordability, estate tax changes or a charitable remainder trust or deferred compensation plan, a life insurance policy can be maximized as an asset through a life insurance settlement.
An unaffordable premium or the change in estate taxes can provoke one to consider a life insurance settlement in the secondary market. The desire to create a charitable remainder trust or the opportunity to cash out a deferred compensation plan may also spur you to seek out the financial institutions that can expedite this process. If you fall within the acceptable life expectancy range, an institutional investment group may be interested in your policy as an asset they can use while concentrating on portfolio management.
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