A lifetime settlement refers to the sale of an existing insurance policy to a third party for a lump sum cash payment.
The buyer of the policy becomes its beneficiary and assumes the payment of insurance premiums, and also receives benefits in the event of the death of the insured person.
Some of the reasons people choose lifetime settlement include retirement, prohibitive insurance premiums, and emergencies.
Viaticals are similar to lifetime settlement agreements.
Because life insurance settlements involve the transfer of the policyholder, they do not constitute life insurance owned by strangers (STOLI).