A common misperception about life insurance settlements is that clients need to sell their entire life insurance policy. This is not necessarily the case. In an article for Think Advisor, I discuss the two options that clients have regarding maintaining some coverage for their beneficiaries.
Convertible Term Policies - if your client has a term policy that is still convertible, the client can convert part of the policy, or keep a portion of the policy as a term policy, for themselves and sell the balance of the policy. This makes sense - don't let the balance of the policy go to waste - sell it and at least your client receives some benefit from it, instead of walking away with nothing.
Retained Death Benefit - for other types of policies (non-convertible term, whole or universal life), a retained death benefit (RDB) may be the solution. Through an RDB, the client sells the policy, but retains a portion of the death benefit for their family, and has no more premium payments.
For more details, as well as real client examples as to how both of these options work, here is the link to the full article: