Which type of contract allows a policyowner to sell their whole life insurance policy for more than its cash value?

A Life Settlement Contract is a specific financial agreement that enables a policyowner to sell their whole life insurance policy for an amount greater than its cash value. This arrangement often occurs when the policyholder no longer needs the insurance, cannot afford the premiums, or wants to liquidate the policy for cash. In a life settlement, a third party purchases the policy and assumes the premium payments, ultimately receiving the death benefit upon the insured's passing.

In contrast, an Accelerated Benefits Rider is a provision within a life insurance policy that allows the policyholder to access a portion of the death benefit while still alive, typically due to a terminal illness or critical health conditions. This rider does not pertain to the outright sale of the policy.

Term Life Insurance is designed to provide coverage for a specific period, offering no cash value accumulation. Therefore, it cannot be sold in the same manner as a whole life policy.

A Universal Life Contract is a flexible premium, adjustable benefit type of permanent life insurance that builds cash value, but like term insurance, it does not inherently involve the sale of the policy for an amount exceeding its cash value mentioned in the context of life settlement agreements.

Overall, the mechanism of a Life Settlement Contract is what enables the selling of a whole life