That under certain conditions, a life insurance policy may be converted to a Marital Asset available for distribution to either spouse?
In many cases, spouses own old life insurance policies and the discussion ensues over whether to drop the policies, use any existing cash value to pay debts, distribute to either spouse, etc. Now there is an opportunity to “extract water from a stone” where the owner of the policy can sell an existing policy in a secondary market. In this transaction called a Life Settlement, the insured passes on all ownership and policy payments to a third-party life settlement company that pays the insured a cash payment that is often higher than the cash value of the policy. The existing protection can, in fact, be a term policy.