Consumers in the United States secure millions of Life Insurance policies each year. Life Insurance provides a security net for individuals and businesses securing property and assets giving piece of mind to the policy owners and their families. Since the 1800s, Life Insurance companies have played a key role in the overall financial plan of many millions of consumers.
A Life Insurance policy is a key asset just like your home or car and can provide financial benefits beyond insuring your life against illness or death. Most consumers never realize their Life Insurance policy can be sold much like any other asset.
Life Settlement Legal Overview:
In 1911, the United States Supreme Court ruled in Grigby vs. Russell that Life Insurance is an asset much like other property owned by the policy owner and convertible to other forms of value. The transaction is know as a Life Settlement and became a legally viable option upon this ruling by Justice Oliver Wendell Homes Jr.
This case is of particular interest because the policy owner needed to fund a medical procedure and offered his policy for sell to Dr. Grigsby for $100. The transaction required Dr. Grigsby to maintain the insurance premium payments through Dr. Burchard’s death. Upon trying to collect the Life Insurance proceeds upon Mr. Burchard’s death, Dr. Grigsby was challenged in court claiming the transaction was invalid.
The case eventually made it to the Supreme Court where Justice Oliver Wendell Homes Jr. declared : ” So far as resonable safety permits, it is desirable to give to Life Insurance Policies the organary characteristics of property. To deny the right to sell except to persons having such an interest is to diminish appreciably the value of the contact in the owner’s hands.”
Life Settlement Market Explodes!
In the 1980s, Life Settlement became an investment rage as the AIDS epidemic spread throughout the United States. In many cases, insured’s received short-term death sentences after being diagnosed with HIV/AIDs. Many resorted to selling their Life Insurance policies to eager investors looking to cash in on a quick investment home run.