Saving Face : A Solution to the Hidden Crisis for Life Insurance Policyholders

The total face amount of terminated life insurance in the U.S. amounts to over two trillion dollars per annum. Little known is that, instead of allowing insurance carriers to pocket the premiums paid until termination and avoid the death claim, many policyholders may realize their policies' value through resale to the secondary market, and receive a lump-sum markedly above the surrender value. We demonstrate how the inclusion of a mandated secondary sale provision in a policy contract will affect — and ultimately benefit — the welfare of policyholders without negatively affecting that of insurance companies