American seniors are finding that life insurance policies that once seemed suitable, no longer meet their needs-making life settlements an attractive solution during challenging economic times.

The current economy is tough on many Americans, especially the elderly. Many seniors are strapped for cash without the means to tap into more money. That is unless, of course, they own a life insurance policy. A life settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its net death benefit, according to the Life Insurance Settlement Association ( LISA).

A life settlement proves to be a viable option for seniors because the majority of them are living with life insurance policies that no longer meet their needs. Whether the premiums are too high or the beneficiaries have already died, they can turn their unwanted policy into instant cash through senior life settlements insurance. While insurance companies allow customers to surrender their policies, policy owners are only offered a small portion of the policy's face value such as three to five percent. The problem is, however, that insurance companies do not disclose this option to their customers. What's more, they discourage their personnel from telling customers about life settlements investment-an opportunity that allows seniors to tap into better cash outcomes thus obtaining far greater payoffs on their existing policies.

Life settlement transactions are typically undertaken for the purpose of estate or financial planning; however American consumers are allowed to use the cash for a variety of purposes including giving gifts to family members or charities.

Instead of being stuck paying high premiums or living with a life insurance policy that no longer meets their needs, life settlements provide an important opportunity for many people who may be living without any other means to tap into much needed funds. Life settlement brokers and financial planners are able to provide the information on how to go about such a transaction.

"Life settlements offer consumers payoffs that can be significantly greater than surrendering a policy," according to LISA. "Life settlements offer a reasonable and profitable exit strategy that addresses the financial objectives of policyholders."

Sarah Michaels is a writer who resides in Cleveland, Ohio. Her work has appeared in numerous print and online publications.