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Man sells $1.5 million life insurance for $430,000 in life settlement
The life settlement capped his payout at the sale price, after his wife signed away beneficiary rights and he took $430,000 in exchange for policies worth $1.5 million.
A man with rare stage 4 lung cancer sold two life insurance policies worth a combined $1.5 million in what is known as a life settlement, according to Yahoo Finance, with the buyer collecting the death benefit when he dies.
He received $430,000 for the policies after his wife signed away her rights as beneficiary. The seller said he used the proceeds to pursue investing plans that, if successful, could exceed the $1.5 million his family would have received after his death.
The price in such deals depends on the insured person’s life expectancy relative to the policy size, the article says. The buyer becomes the new owner, takes over premium payments, and collects the payout later.
The process involved a broker, Evergreen Settlements, and an auction as buyers priced offers based on medical information, with the winning bid from Coventry coming in at $470,000 before the broker took $40,000, leaving the $430,000 sale amount.