Selling Your Life Policy?

By Rachel Ensign, Wall Street Journal

More companies are trying to buy people's life-insurance policies. But are these so-called life settlements worth it?

With life settlements, a company buys your whole-life insurance policy for more than an insurer would pay you if you canceled the policy, but less than what your death benefit would be. The buyer then continues paying the premiums and eventually receives your death benefit.

But insurance experts say these deals aren't for everyone and can be prone to fraud.

A settlement may be a good idea if your policy's beneficiary has died and you have no one to replace him or her, or if you no longer need insurance. How much you'll be offered depends on your life expectancy, premiums and death benefit.