A life insurance policyowner may no longer need life insurance.Such a policyowner may sell the policy to a third party for more than its cash value.The purchaser becomes the new beneficiary and is responsible for subsequent premium payments.Such a financial transaction is called a(n)

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This financial transaction is called a life settlement, where the policyowner sells the policy to a third party for more than its cash value and the purchaser becomes the new beneficiary and responsible for subsequent premium payments. A collateral assignment involves using the policy as collateral for a loan, an accelerated death benefits rider allows for early payment of some or all of the death benefit in the case of terminal illness, and an absolute assignment involves transferring ownership of the policy to another party without the option to change it in the future.

A Life Insurance Policyowner May No Longer Need Life Insurance