A life settlement involves the sale of a life insurance policy by its owner or insured to a third party. The seller receives a one-time lump-sum payment for an amount greater than the policy's cash surrender value and the buyer becomes the owner or beneficiary of the policy. Upon the insured's death, the death benefit is paid to the current owner of the policy.

An estimated $6.1 billion in face amount was sold in 2006, up from $5.5 billion in 2005*.

Many states regulate the secondary sale of existing life insurance policies and many other states are considering its regulation. ILMA is an active participant in advancing the regulation and transparency of the life settlement market.