What life policies have the best potential for life settlements?
Life settlement purchasing companies will buy most types of life insurance including universal, low cash value whole life, convertible term, and survivorship. Universal policies are the most desirable and account for the majority of transactions. Term must be convertible to universal life (not whole life), and the conversion option should not be within six months of starting the life settlement process. Survivorship Life policies in which the insured has a serious medical condition have value in the secondary marketplace. In this circumstance, the policy should have a low cash surrender value relative to face amount. There is currently low demand in the secondary market for Whole Life policies.
