Selling a life insurance policy, also known as a life settlement, involves selling the policy to a licensed buyer, known as a Settlement Provider. The Provider becomes the owner of the policy, pays the policyholder a lump sum cash payout, and pays the premiums going forward. The policyholder is no longer responsible for any policy expenses. Selling your policy typically allows you to receive more money than if you surrender or terminate the policy with the insurance company for the cash value. If you stop paying the premiums and lapse the policy you typically will receive nothing. People often pursue a life settlement because they no longer need or can afford their life insurance policy and would rather have cash in their pocket. You can use the money received from a life settlement transaction however you’d like, including paying for long-term care needs, medical bills, or funding your retirement.