What is one key advantage of life settlements for policyholders?

One key advantage of life settlements for policyholders is that they provide immediate cash value that exceeds the surrender value of the policy. In a life settlement, a policyholder sells their existing life insurance policy to a third party for a lump sum cash payment that is often greater than the amount they would receive if they were to surrender the policy back to the insurer. This provides the policyholder with a significant financial benefit, especially if they no longer need the coverage or cannot afford the premiums, but still want to realize the value from the policy.

This outcome is particularly advantageous for those who may have unneeded or unaffordable life insurance, as they can access cash that can be utilized for various purposes, such as paying for medical expenses, retirement needs, or other financial obligations. In contrast, while other options might present benefits, they do not capture the unique financial advantage that a life settlement provides in terms of immediate cash that outstrips the policy's surrender value.