What is a Life Settlement A Life Settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its net death benefit. Life settlements give life insurance policyholders access to the market value of their life insurance policies. The most obvious benefit of life settlements is that they provide life insurance policyholders with a source of revenue. A life insurance policy is considered to be an asset, much like a car or a house. Many people, primarily seniors, are not aware that their unneeded policies can be sold for a lump sum of cash, and do not know how to go about contacting interested parties. These people often end up paying premiums on unwanted policies or surrendering their policies to the insurance company.