Legal Definition of life settlement
: an agreement by which the owner of a life insurance policy covering a person (as the owner) who is usually a senior citizen receives compensation for less than the expected death benefit in return for the sale, assignment, transfer, devise, or bequest of the death benefit or policy ownership to another party (as a company specializing in such transactions) — compare viatical settlement
Additional Notes on life settlement
Viatical settlement is typically used for the transfer of a life insurance policy for which the insured has a short life expectancy (usually less than two years), while life settlement is used for the transfer of a policy for which the insured has a longer life expectancy.
Learn More about life settlement
Dictionary: Definition of life settlement
Seen and Heard
What made you want to look up life settlement? Please tell us where you read or heard it (including the quote, if possible).