An important legal development for consumers that own life insurance policies has occurred in Washington State and most recently in the state of Maine.  Ironically, the two states furthest away from each other on the continental map, both see eye to eye when it comes to protecting the rights of consumers.  Both states have passed a law requiring life insurance companies inform policy owners that they have the legally guaranteed right to sell their policy through a “life insurance settlement”.
 
National statistics show that 90% of life insurance polices are either surrendered for very little cash value or are allowed to lapse (in either case, the insurance company cancels the policy and owes nothing more to the policy owner).  Through a life settlement, the policy owner can sell their policy to the highest bidder and could receive as much as 500% more than the cash value.
 
The law, now passed in two states, is under consideration in many more states including swing states Kentucky and Indiana.  The law mandates that insurance companies inform policy owners of their legal right to sell their policy through a life settlement.  The law also forbids insurers from interfering with a life settlement.
 
With seniors and baby boomers facing economic challenges and shrinking government dollars to help pay for the costs of senior housing and long term care, the need for alternative financial options is at an all time high.  Instead of allowing a life insurance policy that has re-sale value to just terminate, seniors can tap into that value through a life settlement.  With this law passing, policy owners will now be informed of the life settlement option as a legal right to raise the most money possible through their valuable asset-- and soon many more states around the country will benefit from this important consumer law.